Perfect World Co. Ltd. said Monday that its net income sank by half in the second quarter, as fewer people played the company's online games and revenue fell sharply.
The Chinese company also forecast that revenue in its current quarter would be flat to slightly down from the second quarter, noting that it doesn't expect to launch its upcoming title, "Return of the Condor Heroes," until late in the third quarter, at earliest.
Meanwhile, Chairman and Chief Executive Michael Chi said he will share the CEO job with Robert Hong Xiao, the company's chief operating officer. Chi will remain chairman and focus primarily on the strategic direction of the company. Xiao will be responsible primarily for boosting the efficiency of the company's operations.
U.S.-traded shares for the Beijing-based company fell 9 percent in extended trading.
For the three months ended June 30, Perfect World reported net income of 158.2 million yuan ($24.9 million), or 3.25 yuan (51 cents) per American depositary share. That compares with net income of 316.6 million yuan, or 5.98 yuan per U.S.-traded share.
Excluding the cost of paying employees in stock, earnings were 3.60 yuan (57 cents) per U.S.-traded share.
Analysts surveyed by FactSet predicted earnings of 58 cents per share.
Perfect World's revenue fell 13 percent to 676.4 million yuan ($106.5 million) from 779.6 million yuan a year earlier. Analysts had forecast revenue of $105.9 million.
Licensing revenue fell 24 percent to 46.9 yuan ($7.4 million) from 61.8 million yuan in the prior-year quarter. Other revenue tumbled 46 percent to 3 million yuan ($500,000) from 5.6 million yuan.
Management noted that the company did not launch any major new games during the second quarter. Instead, it focused on preparing for upcoming launches and augmenting content in its roster of existing games.
The company also ramped up efforts to squelch cheating on its games, a move Perfect World said contributed to an 8 percent decline in the average concurrent users for games operating in China from the first quarter to the second quarter.
For the current quarter ending in September, Perfect World anticipates revenue to range from 643 million yuan ($101.1 million) and 676 million yuan ($106.3 million). That's below the $118.3 million analysts are expecting.
U.S.-traded shares of Perfect World ended regular trading down 49 cents, or 4.5 percent, at $10.52. The shares fell 92 cents to $9.60 in afterhours trading.