King Digital Entertainment, maker of the Candy Crush Saga video game, plunged as much as 26 per cent in extended trading after posting second-quarter sales that trailed analysts' estimates and cutting its 2014 outlook.
The shares slumped 21 per cent to $14.35 at 4:51 p.m. on Tuesday in New York after earlier falling to $13.40.
King is working to develop a wider assortment of games as the number of players for Candy Crush declines. With new titles such as Pyramid Solitaire Saga, King has been trying to avoid the decline that hit Zynga, which relied too much on FarmVille for revenue. King shares have slumped 19 per cent since the company's March initial public offering through the close of regular trading on Tuesday.
"Candy Crush declined more than we had expected" in the second quarter, said Riccardo Zacconi, King's chief executive officer, on a conference call on Tuesday to discuss the results. "Our non-Candy Crush games did not grow as much as we had expected and, as a result, did not offset the decline in Candy Crush."
Adjusted revenue rose 29 per cent to $593.5 million from a year earlier, the Dublin-based company said on Tuesday in a statement. That missed analysts' projections of $605.7 million.
Bookings, the value of virtual merchandise sold during the period, rose 27 per cent to $611 million from a year earlier, but slipped 5 per cent from the first quarter, due to lower demand for Candy Crush Saga, the company said.
King projects bookings of $500 million to $525 million in the quarter ending September 30, according to the statement.
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The company also declared a $150 million special dividend on Tuesday. Profit in the second quarter excluding items grew to 59 cents a share from 45 cents a year earlier, meeting the average of 12 analysts' estimates.
King announced a Chinese version of Candy Crush in partnership with Tencent Holdings in April.
Competitor Zynga, which makes FarmVille and Words With Friends games, is also adding new products amid declining revenue. The company recently signed agreements with the National Football League, Tiger Woods and Warner Bros to create new games.
- Bloomberg