Tencent second quarter revenue up lower-than-expected 19 percent as gaming growth slows

Reuters News
Posted: Aug 12, 2015 5:56 AM

BEIJING (Reuters) - Tencent Holdings Ltd <0700.HK>, China's biggest social network and online entertainment firm, said second-quarter revenue rose 19 percent, slightly below estimates, as growth at its core gaming business slowed.

Revenue for the quarter ending June rose to 23.43 billion yuan ($3.67 billion), Tencent said in it earnings statement on Wednesday, compared to the 24.12 billion yuan forecast made in a Thomson Reuters Smartestimate poll of 11 analysts.

Revenue at the gaming unit grew 17 percent year-on-year in the quarter, a slowdown from the previous quarter's 29 percent growth, Tencent said.

Revenue from smartphone games, a priority for the company as the popularity of PC games declines, appeared to be hardest hit, growing at just 11 percent year-on-year compared to 82 percent year-over-year in the previous three months.

Bolstering Tencent's overall revenue was its online advertising unit, which the company said nearly doubled its quarterly revenue to 4 billion yuan.

Tencent, which operates China's most popular messaging app WeChat, has recently ramped up online ads, following the lead of U.S. social media peer Facebook Inc <FB.O>. Global monthly users of WeChat exceeded 600 million at end-June, the company said.

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Tencent's net income rose 25 percent to 7.31 billion yuan, in line with analyst expectations of 7.32 billion yuan.

(Reporting by Gerry Shih; Editing by Miral Fahmy)