Tom Reese/Paul Rubillo, Dividend.com
China-based online gaming company Shanda Interactive Entertainment Ltd (SNDA) reported first quarter earnings Wednesday that beat expectations, sending its shares to new all-time highs.
The company, which operates out of Shanghai, reported first quarter net income of 361 million RMB (U.S. $52.8 million), or 5.28 RMB (U.S. 78 cents) per share, compared with a profit of 288.8 million RMB, or 3.94 RMB per share, in the year-ago period.
Excluding one-time items, Shanda earned 5.48 RMB or U.S. 80 cents per share, while revenue rose to 1.11 billion RMB (U.S. $162 million) from 779.8 million RMB in the first quarter last year.
On average, Wall Street analysts expected a profit of 74 cents per share on lower revenue of $155.7 million.
The company cited strong massively multiplayer online role-playing game (MMORPG) revenue for the earnings beat, but casual gaming revenue also posted gains in the latest quarter.
Shanda Interactive shares rose $2.42, or +4%, in late morning trading Wednesday.
The Bottom Line
Shares of SNDA have had a nice move this year, nearly doubling in price already. If you are an aggressive investor and can be nimble enough, these shares offer an opportunity for potential further upside. We would look for potential pullbacks in the low to mid-$50s for an even better risk/reward scenario.
Shanda Interactive Entertainment Ltd (SNDA) does not currently pay a dividend.
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