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King Beats, but Stock Drops Hard on Weak Outlook

Shares are down almost 12 percent as the Candy Crush maker warns investors to brace for a couple rough quarters.

King

Candy Crush Saga maker King Digital today reported that in the quarter that ended in March, it made $197 million in profit, or 61 cents per share, on sales of $570 million. Wall Street was expecting earnings per share of 53 cents, on sales of $563 million.

King forecast, however, that the next two quarters will be weaker, with between $490 million and $520 million in gross bookings in the next quarter, below average analyst expectations from before the bell.

After hours today, King shares fell almost 12 percent to $13.25 as of the time of this writing. Since last July, it has not crossed its IPO price of $22.50.

On a call with investors, CEO Riccardo Zacconi said the company planned to both extend its casual gaming efforts and expand into new, non-casual genres. COO Stephane Kurgan said two non-casual games — a resource-management title called Paradise Bay and an unannounced “midcore” title — will launch by the end of the year.

Monthly active users were 550 million, versus 481 million in the same quarter a year ago. Monthly unique paying users were down 28 percent in the same time frame, but King says it’s making $5, or 23 percent on average, more per user than it was then.

Last quarter, Wall Street loved the fact that the company appeared to be moving away from its dependence on its most famous title, with less than half of its revenue coming from non-Candy Crush Saga games. That gap has increased even more, with non-Candy Crush titles representing 62 percent of revenue in the first quarter.

This article originally appeared on Recode.net.

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