Tencent Holdings early Wednesday reported third-quarter earnings and sales that topped expectations. Tencent stock climbed higher on the news.
The China-based messaging and gaming company reported adjusted earnings of 64 cents per U.S. share on revenue of $21.4 billion. Analysts expected Tencent to report earnings of 57 cents a share on revenue of $21.2 billion. Sales climbed 10% year over year in local currency.
On the stock market today, Tencent stock jumped 5.2% to close at 42.80. Tencent stock is listed in Hong Kong and trades over-the-counter in the U.S.
Gaming Boosts Revenue
The parent company of the WeChat super-app highlighted growth in its gaming division. International-game revenue grew 14% and domestic-game revenue rose 5% in local currency.
"Relatively new services such as video accounts and mini games contributed high margin revenue streams while we refocused away from less-scalable activities," said Chief Executive Ma Huateng in a news release. "We are increasing investment in our AI models, providing new features to our products and enhancing our targeting capabilities for both content and advertising."
Advertising revenue climbed 20% year over year local currency revenue to $3.5 billion.
Monthly active users for WeChat and its domestic sister application, Weixin, climbed 2% year over year to 1.34 billion.
Tencent Stock: Down 4% In 2023 Prior To Earnings
U.S.-listed shares of Tencent had fallen just under 4% on the year as of market close Tuesday. Broader concerns about the Chinese economy have pushed shares lower this year for Tencent, as well as Chinese e-commerce firms JD.com and Alibaba.
Tencent's stock has a Relative Strength rating of 47 out of a best-possible 99, according to IBD Stock Checkup. Relative Strength tracks a stock's share price performance over the last 52 weeks, and then compares the result to that of all other stocks.
