Perfect World Shares Down Sharply In PreMarket Trading

As Citi cautioned previously, Perfect World PWRD delivered a mixed set of 3Q10 results with total core revs coming in 3% and 4% below Citi's and Street's expectation and also coming in below its guidance range. As widely expected, margins also came under pressure due to lower margins from movie revs and higher R&D cost. 4Q10 core revs were guided to +1 to +5%, below Citi's and Street's estimates going into the quarter. Total core revs were guided to between Rmb581m and Rmb604m, up 1% to 5% QoQ, or US$86.9m to US$90.4m. The mid point of the guidance at US$88.7m is 7% below our US$95m and 6% below Street's US$94.7m. PWRD closed Monday at $31.47 and is trading down 13% in Premarket trading