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King Digital "Candy Crushes" Q4 Earnings, Stock Up 20% After Hours - Stocks in the News

Zacks Research Staff

King Digital Entertainment is an interactive entertainment company.  KING specializes in incorporating a puzzle element in its games.  The best example of this can be seen in the company’s most popular game, Candy Crush.  In this game the goal is to match up candy of the same color, with each match giving a delightful sound and colorful stimulation, making for an addictive gaming experience.

Investors were loading up on King today, with an exceptionally large volume of 6.4 million shares traded.  The company normally sees its average volume trading at about 1.7 million shares daily. The EPS consensus movement saw no revision in the past 90 days, staying at $0.37.  

The stock has been downgraded in the past week, going from a Zacks Rank #3 (Hold), to a Zacks Rank #4 (Sell).  This may change soon though, as the company posted a positive earnings report which we have briefly detailed below:

Earnings:  King beat the Wall Street EPS consensus of $0.47, reporting its actual EPS to be $0.57.

Revenue:  KING also beat our consensus estimate on revenues.  Our consensus estimate was $519 million, but the company posted actual adjusted revenues of $559.2 million.

Key stats:  It is worth noting that Candy Crush Saga, the company’s most popular game, no longer represents the majority of its revenue.  The company announced its Q1 bookings guidance following the earnings report, to be within the range of $575-600 million.  King is also declaring a special dividend of $0.94 per share, payable to shareholders on the 14th of March.

Stock Price:  By the time the market closed today, King’s stock had risen 4.24%.  Since the earnings announcement, which was declared after the market closed, the stock has surged an additional 20%. 

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