Chinese technology giant Tencent Holdings Ltd. said net profit rose 46.4 percent to 5.66 billion yuan (US$923.98 million) in the third quarter, well below analyst estimates of 6.17 billion yuan.
Revenue was up 27.5 percent at 19.81 billion yuan, the slowest growth in seven years, against forecasts of 20.57 billion yuan, Reuters reported, citing the company’s filing with the Hong Kong stock exchange.
Mobile gaming sales, the biggest driver of revenue growth in the previous quarter, fell to 2.6 billion yuan in the three months to September from 3 billion yuan in the second quarter.
Tencent’s results were worse than management had forecast, confirming investor worries that cooling sales from mobile gaming would be a drag on the US$154 billion company’s results.
The stock has lost as much as 13 percent of its value after company executives warned in August that mobile gaming revenue growth could be flat during the second half of the year, the report said.
Global monthly active users of its WeChat, the country’s most popular mobile app, rose 6.8 percent from the previous quarter to 468 million monthly active users, its slowest rate of quarterly growth since Tencent started releasing figures.
Management blamed the revenue slowdown on compliance issues with Apple Inc.’s iOS mobile operating system. These delayed game upgrades on both iOS and Google Inc.’s Android operating system as Tencent synchronises updates across both platforms.
“It’s an industry that has grown explosively,” chief strategy officer James Mitchell was quoted as saying. “Notwithstanding the temporary blip that we experienced in the fourth quarter, for a quarter.”
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