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Investing.com -- Embracer (ST:EMBRACb) saw its shares tumble around 23% on Thursday after the company posted a weaker-than-expected first-quarter result on Thursday and cut its full-year earnings outlook, citing softer demand for PC and console titles.
The stock was on track for its steepest single-day fall in two years.
The Swedish gaming group reported adjusted operating profit of 75 million crowns ($7.9 million) for the fiscal first quarter, well below the 141 million crowns expected by analysts.
It anticipates the second-quarter profit will be similar, compared with market forecasts of 359 million crowns.
The slowdown was attributed to competing game releases that drew players’ attention, weighing on user growth for “Kingdom Come Deliverance II,” which debuted in February.
The company’s sales for the quarter fell 31% (-2% organic) to SEK 3.36 billion from SEK 4.89 billion.
"Our overall group Q1 results reflect a quiet quarter for PC/Console releases. This year will be a transition year in terms of own major releases, and we will be highly focused on operational and strategic execution," said CEO Phil Rogers.
For the full year, Embracer now expects adjusted EBIT of “at least” 1 billion crowns ($104.6 million), down sharply from its earlier projection that earnings would be broadly in line with last year’s 2.4 billion crowns.