Chinese tech giant Tencent has blamed declining gaming revenues for a weaker-than-expected 7% rise in fourth-quarter revenue on Wednesday.
The world’s largest video game company and operator of the WeChat messaging platform reported revenue of $21.56 billion for the three months ended December 31, and said it was expecting to at least double its share buybacks this year.
That compared with the $21.84 billion average of 23 analyst estimates compiled by LSEG.
Tencent’s core gaming business suffered a notable slowdown in the fourth quarter. Gaming revenue in China declined 3% to $3.75 billion, while international gaming revenue increased only 1% to $1.93 billion, or declined by 1% when excluding currency fluctuations.
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The company also said intends to at least double the size of its share repurchases from $6.26 billion in 2023 to over $12.78 billion in 2024. Its shares had fallen some 16% over the past year to Tuesday’s close.
For all of last year, Tencent’s revenue rose 10% to $84.6 billion, which trails expectations at $85.04 billion.
Still, this marks a year of recovery for Tencent, which reported its first annual revenue decline in 2022 as it was hit by Beijing’s sweeping crackdown on the tech sector. By comparison, it saw revenue growth in every quarter last year.
Revenue from online ads rose 21% to $4.14 billion as the Shenzhen-based giant continues to expand its ad distribution capability.
Revenue from fintech and business services grew 15% to $7.57 billion as the firm continued its expansion in those areas.
Net income for the quarter declined 74% compared with the same period last year, but the decline was attributed to Tencent’s sale of its Meituan stake.
Excluding the impact of investment-related transactions, Tencent said its quarterly profit grew 44% year-on-year to $5.93 billion.
- Reuters with additional editing by Sean O’Meara
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