Perfect World: Company Trumpets Less-Than-Perfect Results But Hopes for Better

Let’s start the day with a look at online game operator Perfect World (Nasdaq: PWRD) which blitzed the market overnight with not one but three announcements on 1) it’s far-from-perfect fourth-quarter results; 2) a $100 million share buyback; and 3) new agreements to license some of its upcoming games to companies in Vietnam and Thailand. (results announcement) The Q4 numbers were hardly encouraging, with revenue and profit both dipping, reminiscent of what we’ve seen from other leaders in the past like Shanda (Nasdaq: SNDA) and The9 (Nasdaq: NCTY). Whereas the former has bounced back somewhat after it found some new big titles, the latter has largely languished since losing its hit (borrowed) World of Warcraft franchise. Perfect World would have us believe it is poised for comeback with a stream of new self-developed titles coming up, and I do like it’s proactive strategy of looking to license those titles to outside operators sooner rather than later to diversify its revenue. Its $100 million buyback is another bet that it believes it is poised for comeback. I’d say it’s certainly worth giving them a chance, though perhaps just for this year, to see if they can bring a little more perfection back to their ailing top and bottom lines.