This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

King Digital Candy Crushed: What Wall Street's Saying

Stocks in this article: KING TCEHY

Updated from 9:01 a.m. to include thoughts from JPMorgan analyst.

NEW YORK (TheStreet) -- King Digital Entertainment (KING), better known as the maker of Candy Crush Saga, saw its shares crushed after the company lowered guidance for the rest of the year, citing concerns about seasonality and the impact of the World Cup.

For the second quarter ending in June, King earned an adjusted 59 cents a share on $593.5 million in revenue, up 30% year over year, but down 2% sequentially. Gross bookings for the quarter came in at $611 million, up 27% year over year, but down 5% sequentially.

Monthly active users rose 83% year over year to 485 million, while daily active users rose 82% year over year to 138 million.

Analysts surveyed by Thomson Reuters were expecting 59 cents a share on $609 million in revenue.

Read More: How Tiger Woods Becomes Zynga's Last Hope For Glory

The company also announced a special $150 million dividend, which will be paid to shareholders on Sept. 30, to "enhance returns for our shareholders," according to a statement from King CEO Riccardo Zacconi.

Zacconi also announced that the company that it was partnering with Chinese Internet giant Tencent (TCEHY) to roll out a localized version of Candy Crush Saga, and is launching its first sequel, Bubble Witch 2 Saga, as well as taking advantage of the company's acquisition of Nonstop Games.

Games such as Farm Heroes Saga and Bubble Witch 2 Saga have not proven to be the huge hit Candy Crush Saga became, a game that accounted for 59% of its gross bookings in the second quarter. Candy Crush continues to be in decline, having approximately $361 million in gross bookings this quarter, compared to approximately $430 million in the first quarter, according to Bank of America Merrill Lynch analyst Justin Post.

Shares of King Digital plunged in early Wednesday trading, falling 23.1% to trade at $13.99.

The company lowered 2014 expectations for both the third quarter and the fiscal year. It now expects third quarter gross bookings to be between $500 million and $525 million, with full year gross bookings between $2.25 billion and $2.35 billion.

Read More: How Facebook Has a Huge Opportunity in China

Following the report, analysts were largely negative on the stock. Here's what a few of them had to say:

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,187.49 -3.88 -0.02%
S&P 500 2,005.79 +3.63 0.18%
NASDAQ 4,640.7130 +2.7190 0.06%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs