Tencent Holdings (TCEHY) reported first-quarter results Wednesday that met on earnings but missed revenue estimates as growth slowed for the China internet giant. Tencent earnings arrived before the market open.
The company reported adjusted earnings of 32 cents per share on revenue of $12.69 billion. Wall Street expected earnings of 32 cents on revenue of $12.8 billion. Revenue rose 16% from the year-ago period, in local currency, but was its slowest quarterly growth in more than four years.
Tencent stock, which trades over-the-counter, dropped 2.2% to 46 in morning trades on the stock market today.
Tencent is China’s largest provider of messaging services and mobile gaming. The quarter ended with 1.1 billion users on its WeChat platform, the largest messaging service in China. It’s also used for online payments and a variety of other services. WeChat user growth was up 7% from the year-ago period.
The company said China Internet users are increasingly using WeChat’s in-app camera functions to record short videos. The videos are being shared in one-to-one chats, group chats, and social platforms.
Revenue From Financial Services Revealed
Tencent broke out revenue numbers for its financial technology and business services unit for the first time. It showed revenue of $3.17 billion, up 44% in local currency from the year-ago period. Increases in commercial payments and other services such as microloan products and cloud computing services drove growth.
Online ad revenue grew 25% to $1.94 billion.
“We are building solid foundations for future growth in both the consumer and industrial internet domains.” said Ma Huateng, Tencent chairman and chief executive, in prepared remarks with the earnings release.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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