Glu Mobile, the mobile gaming company behind the hit Kim Kardashian: Hollywood app, saw its share price fall more than 16% in after-hours trading as the company had trouble keeping up with Wall Street’s expectations despite a 270% increase in third-quarter sales. Here are some of the key points of Glu Mobile’s Wednesday third-quarter earnings report.
What you need to know: The game-maker reported third-quarter revenue of $83.6 million, up from $22.6 million during the same quarter last year and also an improvement on the $35 million in sales Glu Mobile posted in the second quarter. Though it was the company’s strongest quarter ever, the sales numbers fell below estimates by analysts who were expecting Glu Mobile to crack $85 million in revenue.
The company did manage to beat analysts’ earnings estimates, however, reporting profits of $17.5 million, or 17 cents a share, for the quarter.
Glu Mobile (GLUU) CEO Niccolo de Masi attributed the company’s record quarter to the popularity of Kim Kardashian: Hollywood as well as some of the company’s other gaming titles, such as Deer Hunter 2014 and Dino Hunter: Deadly Shores. The Kardashian game is free to download to smartphones and tablets, but users create their own avatars and then spend money dressing and styling them with virtual clothing and accessories. The goal of the game is to steer your avatar’s climb to fame by emulating the Kardashian lifestyle – including hanging out with celebrities, traveling to exotic virtual locales, and even planning a virtual wedding.
The big number: San Francisco-based Glu Mobile’s stock plunged more than 16% in after-hours trading partly because of the slightly disappointing sales numbers. But, investors were also discouraged by the company’s fourth-quarter outlook, which also came in below Wall Street’s forecasts. Analysts were expecting more than the $60 million to $65 million range for Glu Mobile’s sales outlook in the current quarter.
What you might have missed: Glu Mobile is doubling down on its partnership with Kim Kardashian, announcing in its earnings release that it has extended its license agreement with the reality television star for an additional three years. The pairing has been profitable for both sides as Bloomberg has estimated that the game could make up to $200 million annually from ads and in-game purchases, with Kardashian getting a healthy cut. At a Re/code event this week, Kardashian said that more games featuring her are in the works.