Tencent misses estimates with 52 per cent rise in fourth-quarter profit and warns on virus impact
- China’s biggest social media and gaming company misses fourth quarter estimates amid delays to cloud projects
- It warns there will be an impact from coronavirus pandemic due to closed restaurants and economic slowdown
Tencent Holdings, operator of China’s biggest social media and video gaming businesses, announced fourth quarter profits which missed estimates, saying that while the coronavirus pandemic has seen users spend more time on its games and videos, it has had a negative impact on advertising and mobile payments.
The Hong Kong-listed company reported net income of 21.6 billion yuan (US$3 billion) in the quarter ended December, compared with 14.2 billion yuan in the same period the previous year – missing a Bloomberg consensus estimate of 22.8 billion yuan.
Revenue reached 105.8 billion yuan, up 25 per cent year-on-year and more than an earlier consensus estimate of 103.7 billion yuan, according to 18 analysts polled by Bloomberg.
“Our users spent more time on online entertainment, including video and games, during the coronavirus outbreak,” Martin Lau, Tencent’s president, said during the earnings call on Wednesday. “But we shifted more resources and people … to public service sectors, such as online health care and online education during the pandemic.”