Tencent Music (TME) - Get Report has had a good 2019 since its public debut in late 2018, but the stock was falling sharply after hours on Tuesday following the release of its first earnings report since it went public.
The Chinese music streaming company reported earnings excluding extraordinary items of 8 cents per American depository share (ADS) on revenue of $785 million, which was a 50.5% increase over the year-ago period. The company was expected to report EPS of 2 cents per share on revenue of $779 million, according to analysts polled by FactSet.
Tencent Music officially recorded a net quarterly loss of $127 million, primarily due to a one-time, share-based accounting charge of $221 million related to its issuance of equity to music label partners Warner Music Group and Sony Music Entertainment.
Tencent closed Tuesday's session down more than 3% and further declined more than 7% after hours following the release. Shares have risen about 40% year to date.
"Our initial public offering in December 2018 has launched us onto the international stage, elevated the global recognition towards our brand, and endorsed our successful track record," stated Mr. Cussion Kar Shun Pang, Chief Executive Officer of Tencent Music. "During the fourth quarter of 2018, we recorded strong growth across our business lines, including both online music and social entertainment services, and solidified our market leadership."
The company reported a 6.8% increase in monthly active mobile users to 644 million in the fourth quarter and a 9.1% increase in monthly mobile active users to 228 million.
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