Citi Comments On Giant Interactive's Earnings Beat

Giant Interactive's GA GAAP EPS of US$0.13, was inline with Street estimate while Non-GAAP EPADS of US$0.14, came in one cent better than Citi's and Street's estimate. Giant reported a relatively inline-ish 3Q10 result with total revs growing 17% YoY and 5% QoQ mainly driven by 4% QoQ growth of APA and 1% improvement of ARPU within ZT Online series of game. Higher R&D and G&A expenses were partially offset by lower S&M and higher government incentive. As a result of higher-than-expected government incentive received during the quarter and higher interest income, earnings grew ~14% QoQ, resulting in slight EPS outperformance. Total net revs were US$50.6m, compared to Street's/Citi's US$50.9m/US$49.6m, respectively. GAAP net income came in at US$30.9m or US$0.13 per share, largely inline with Citi's/Street's US$30.4m/$30.0m. Ex-SBC, non-GAAP EPADS came in at US$0.14, vs. Citi's/Street's US$0.13. GA closed Tuesday at $6.87