Shanda misses by $0.02, but reports strong online game and ad revenue growth (SNDA 2Q05 earnings results)

Shanda Interactive (ticker: SNDA) reported Q2 2005 earnings results that beat consensus revenue estimates but missed diluted EPS estimates by $0.02. Key stats from the quarter:

Q2 Results:
(all percentage changes and comparisons are year on year, unless stated otherwise)

• Net revenue rose 88.0% to $65.2 million vs consensus of $61.78 million.
• Net revenue rose 8.5% sequentially.
• Online game revenue rose 72.0% to $56.4 million.
• MMORPG revenue rose 60.3% to $43.7 million.
• Casual game revenue rose 130.1%, but declined 5.1% sequentially to $12.6 million.
• Other revenue (online ads, VAS) rose 365.1%, and rose 31.3% sequentially to $8.8 million.
• Gross margin was 68.4% vs 62.8%, down from 71.0% in Q1.
• Operating expenses rose 82.8% to $15.1 million.
• Product development expenses rose 136.8% to $4.7 million.
• Sales and marketing expenses rose 124.7% to $4.6 million.
• G&A expenses rose 41.3% to $5.3 million.
• Operating income rose 118.2%, but declined 4.0% sequentially to $29.5 million.
• Operating margin was 45.2% vs 38.9%.
• Net income rose 58.2% to $27.0 million.
• Net margin was 41.3% vs 49.1%.
• Diluted EPS of $0.36 vs $0.25, and vs consensus estimate of $0.38.

Balance Sheet (as of June 30, 2005)

• Cash and equivalents of $152.3 million.
• Marketable securities of $276.8 million.

Other Stats

• Total peak concurrent users for all Shanda games in commercial service rose 19% sequentially to 2.5 million.
• Average concurrent users of Shanda's MMORPGs in commercial service rose 2.0% sequentially to 763,000.
• Average revenue per user hour calculated based on net revenues for Shanda's MMORPGs rose 10% sequentially to $0.03.

SNDA chart.

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