Goldman Discusses Perfect World's Earnings (PWRD)

Goldman Sachs is out with a research note discussing Perfect World Co., Ltd. PWRD earnings report. It has a Buy rating on shares. In a note to investors, Goldman writes, "Perfect World (PWRD) reported 3Q10 GAAP EPS of Rmb4.05 or US$0.81 (up 9% qoq), 15%/10% higher than our and Bloomberg consensus, thanks to the booking of TV revenue. Total revenue came in at Rmb658 mn (up 11% qoq, up 12% yoy), including Rmb82.5mn of TV drama revenue (13% of total). Excluding TV revenue, total online game revenue of Rmb576mn was 5%/3% below our forecast and the low end of guidance." Goldman goes on to say, "We attribute the weakness in 3Q to the lack of new game launches in 3Q and softness of Battle of the Immortals ahead of the new sequel release. While we think the weakness in 3Q is understood, the guidance 1%-5% sequential growth for 4Q is below our and consensus expectation, probably because the new games/expansion packs only start to contribute revenue form the mid/end of the quarter."