Earnings estimates for Shanda Interactive Entertainment Ltd. (SNDA) have advanced sharply over the past month for both this year and next.
The Chinese interactive entertainment company has an excellent record of surpassing Wall Street’s quarterly profit expectations, and has made the Zacks #1 Rank Top Performers List for Wednesday with a gain of more than 7%.
SNDA is moving today on lower-than-normal volume of approximately 835,000 shares, compared to the daily average of 1.38 million.
Expectations Higher Than 1 Month Ago
SNDA has a lot of things going for it. The company is at the heart of a surging video game market in a growing economy. Furthermore, SNDA is the leading online gaming company in China, where that form of entertainment is much more popular. (The U.S. is more focused on consoles.)
Such factors have led to a number of strong quarterly reports; the most recent of which helped earnings estimates for this year rise by 8.1% over the past month to $3.32 per share. Out of 11 covering analysts, 8 have revised higher in the past 30 days. A month ago, analysts were expecting $3.07.
Next year’s estimate has improved 11.4% in that time to $3.91 per share, as, again, 8 of 11 analysts boosted expectations. Therefore, the consensus currently suggests that profit for 2010 will advance nearly 18% from 2009.
Another Solid Quarter
Early last month, SNDA reported first-quarter earnings per share of 78 cents, which was 6 cents, or 8.3%, better than the consensus. It continued an impressive record of better-than-expected quarterly results, which has amassed an average surprise of 12.5% over the past 4 quarters.
Consolidated net revenues jumped more than 40% year over year to US$162 million, as revenues related to massively multi-player online role-playing games rose more than 47% and revenues related to casual games increased 1.1%.
Looking forward, the company said it will make efforts to combine its integrated service platform with its diversified content businesses.
At the moment, analysts are expecting 81 cents per share for its second quarter, which is up 8% in the past month.
Internet Content
SNDA is 1 of 3 companies from the Internet Content industry on today’s Zacks #1 Rank List, which includes 222 stocks. The other 2 companies on the list are American Public Education, Inc. (APEI) and KongZhong Corporation (KONG).
