Perfect World -11.3% in spite of EPS beat, in-line guidance

In addition to posting nearly in-line Q2 revenue (while beating on EPS), Perfect World  (NASDAQ:PWRD) has guided for Q3 revenue of RMB956M-RMB1.003B ($155.4M-$163.1M), in-line with a $159.9M consensus.

However, the company's PC gaming base remains under pressure: Average concurrent PC users for games under operation in mainland China totaled 661K in Q2, down from 662K in Q1 and 742K a year ago. Perfect World is counting on mobile titles such as MMORPG Forsaken World and cartoon-style RPG CrossGate Mobile to boost growth.

Nonetheless, online gaming revenue rose 32% Y/Y to $138.8M, and licensing revenue 55% to $7.9M. The strong performance of major PC games such as Swordsman Online and DOTA2 contributed to the growth.

Gross margin fell to 73.1% from 73.6% in Q1 and 76.5% a year ago. Opex rose 19% Y/Y to $88.7M, thanks in part to a 31% increase in R&D spend to $41.9M.

Q2 results, PR

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