'Free Fire' parent Sea's stock soars after revenue beat amid e-commerce strength
By Tomi Kilgore
Gaming business misses Q4 revenue expectations but 'positive trends' in 2024 for 'Free Fire' game
Shares of Sea Ltd. soared toward a seven-month high Monday, after the e-commerce and online-gaming platform company reported fourth-quarter revenue that beat expectations.
The Singapore-based company's results were fueled by strength in its e-commerce business, Shopee. And while the digital-entertainment business, Garena, missed revenue expectations, among the "positive trends" seen was the "Free Fire" game achieving more than 100 million peak daily active users in February.
The stock (SE) shot up 11.7% in premarket trading, to put it on track for an eighth straight gain, and to open at the highest price seen during regular session hours since Aug. 11.
The company swung to a net loss of $111.6 million, or 19 cents a share, from net income of $422.8 million, or 72 cents a share, in the same period a year ago. The FactSet consensus for reported per-share losses was 20 cents.
Revenue grew 4.8% to $3.62 billion, above the FactSet consensus of $3.57 billion.
Among Sea's business segments, e-commerce revenue jumped 23.2% to $2.6 billion, above the FactSet consensus of $2.5 billion. Gross orders climbed 46% to 2.5 billion and gross merchandise value increased 28.6% to $23.1 billion, above expectations of about $22.7 billion.
"Despite an environment of intensified competition in Southeast Asia, we believe Shopee had a meaningful gain in market share between the start and the end of 2023," said Chief Executive Forrest Li.
Digital entertainment revenue dropped 46.2% to $510.8 million, below expectations of $564.9 million.
For Garena, the company said "Free Fire" was the most downloaded mobile game globally in 2023, according to Sensor Tower.
"We are pleased that these positive trends are continuing into 2024," Li said. "In February, Free Fire achieved more than 100 million peak daily active users."
For the digital-financial-services business, or SeaMoney, revenue rose 24.3% to $472.4 million, below the FactSet consensus of $484.5 million.
"For SeaMoney, 2023 was the first year of positive profit, primarily attributed to our consumer and SME [small and medium enterprise] credit business," Li said.
The stock has rallied 33.6% over the past three months through Friday, while the S&P 500 index SPX has advanced 12.4%.
-Tomi Kilgore
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
03-04-24 0803ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
These Stocks Are (Still) Powering the Bull Market
-
5 Undervalued Energy Stocks to Play the AI Data Center Demand Boom
-
After Earnings, Is Lowe’s Stock a Buy, Sell, or Fairly Valued?
-
5 Stocks With the Largest Fair Value Estimate Cuts After Q1 Earnings
-
10 Stocks With the Largest Fair Value Estimate Increases After Q1 Earnings
-
Markets Brief: Inflation Back in the Spotlight
-
AI Is Booming, but Consumer Spending Is Slowing. Which Will Prevail in the Stock Market?
-
What’s Happening In the Markets This Week
-
3 Dividend Stocks for June 2024
-
After Earnings, Is Alibaba Stock a Buy, Sell, or Fairly Valued?
-
MongoDB Earnings: Slashing Valuation as Execution and Macro to Blame for Lower Guidance
-
Marvell Earnings: We Raise Our Medium-Term AI Forecast and Bring Our Valuation Up to $75
-
Zscaler Earnings: Impressive Traction in Emerging Products Drives Sales Growth for the Quarter
-
Dell Earnings: Raising Valuation on Strong AI, but the Stock Remains Severely Overvalued
-
After Earnings, Is Nvidia Stock a Buy, Sell, or Fairly Valued?
-
The 10 Best Companies to Invest in Now