Sea Limited shares tumbled Tuesday after the Singapore-based company posted a first-quarter earnings miss as its digital entertainment revenue halved.
For 1Q, the ecommerce, digital entertainment, and financial services firm achieved a profit of $87.3 million or earnings per share of $0.16, a significant improvement from a net loss of $580.1 million or a loss per share of $1.04 in the first quarter of 2022.
Sea said its profit was negatively impacted by a $117.9 million impairment charge related to a prior acquisition.
Revenue of $3 billion was a 4.9% increase year-over-year from $2.9 billion in the year-ago quarter.
However, Sea’s performance on both the bottom and top line fell short of Wall Street’s expectations of earnings per share of $0.40 on revenue of $3.07 billion, according to Refinitiv.
Also driving Sea’s share price lower was the underperformance of its gaming unit, which contributed to a 52.5% year-over-year decline in its digital entertainment segment’s revenue to $539.7 million from $948.9 million.
Sea shares had fallen 13.4% to US$76.25 on Tuesday morning.
Contact the author at emily.jarvie@proactiveinvestors.com
Follow her on Twitter @emilyjjarvie