Quarter by quarter, Shanda
Last night's third-quarter report was solid. Revenue climbed 50% higher to $87.4 million. Earnings per American Depositary Share soared 65% higher to $0.44, hot on the heels of widening gross and operating profit margins. Analysts were expecting a profit of just $0.43 per ADS on $81.8 million in revenue. (The company also reported a strong second-quarter showing.)
It's hard to believe that this company was stumbling, posting four quarters straight of profit declines through Q3 of 2006. Then, in the online multiplayer gaming market, nimble players such as NetEase
It's Shanda's time to dance now.
Distractions like the EZ Pod home entertainment appliance are gone. Even Shanda's once-desperate push to diversify into casual games seems like an afterthought. Now the online fantasy-games segment remains the largest -- and most rapidly growing -- appendage at Shanda.
The pipeline is rich on that front, too. Shanda has three new games in development slated to roll out next year.
Recent IPOs from companies like Perfect World
It even shed the last of its stake in SINA
That growth is for real. Even with Internet cafe crackdowns and slowdowns at the larger rivals, Shanda is a speedster again.
Eat its dust, naysayer.
For more Chinese games:
Longtime Fool contributor Rick Munarriz is a big fan of China's high-margin gaming stocks. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy that likes the green marbles in Chinese checkers.