Giant Interactive Q4 Profit Rises - Update

(RTTNews) - Online games operator Giant Interactive Group Inc. (GA), Wednesday reported an increase in profit for the fourth quarter, as revenues and gross margins improved. Both earnings and revenues for the quarter trumped analysts' expectations.

Shangai, China-based Giant's fourth-quarter profit rose to 203.6 million yuan or 0.82 yuan per share from 82.7 million yuan or 0.34 yuan per share a year ago. In U.S dollars, earnings for the fourth quarter were $33.6 million or $0.14 per share.

Adjusted earnings for the quarter were 1.76 yuan or $0.29 per share. On average, six analysts polled by Thomson Reuters expected earnings of $0.23 per share for the quarter. Analysts' estimates typically exclude special items.

Giant Interactive, which develops and operate online games, said revenues increased 5.8 percent to 604.56 million yuan from 571.67 million yuan last year. In U.S. dollar terms, revenue was $99.87 million, above analysts consensus estimate of $99.39 million.

Revenue from online games rose 6.5 percent to 591.8 million yuan, attributable to the launch of World of Xianxia in 2013.

Chief Executive Wei Liu said, "Our 2013 results were driven by the launch of World of Xianxia, which has become another successful franchise and demonstrates our ability to expand our portfolio without cannibalizing existing games. At the same time, during 2013 we also made great progress in diversifying into new growth areas such as webgames and mobile games, while continuing to lead the industry in profitability."

Giant Interactive has been able to improve its profit in the past quarters as the online gaming company launched several online multiplayer games and diversified into production of mobile games.

Gross margin for the fourth quarter advanced to 88.8 percent from 86.3 percent last year, while operating costs dropped 15.3 percent to 134.8 million yuan.

GA closed Wednesday's regular trading at $11.41, up $0.06 or 0.53%, on the NYSE. The stock further gained $0.05 or 0.44% in after-hours trade.