The shares of King Digital Entertainment PLC (NYSE:KING) are down in excess of 11% after the company posted weak second quarter financial results. The gaming company reported revenues of $490.0 million over earnings of $0.49 per share for the quarter, matching Wall Street’s expectations. However, the revenue was down by 18% on a year-over-year basis, while the adjusted earnings per share declined by 17%. One of the primary reasons for the decline is the sliding popularity of its number-one game Candy Crush Saga, which accounted for 40% of its gross bookings. The game that single-handedly turned the tables for King Digital Entertainment PLC (NYSE:KING) after its launch on mobile and tablets in 2012, saw gross bookings in the second quarter drop by 13% year-over-year to $529 million.
The shares of King Digital Entertainment PLC (NYSE:KING) are down by 12.6% year-to-date and are trading at $13.50 as of the reporting period. Smart money seems to have had an inkling of the coming slowdown as at the end of the first quarter $338.92 million in shares was held by 28 hedge funds tracked by Insider Monkey, down from investments of $426.71 million at the end of December. The shares of King Digital Entertainment PLC (NYSE:KING) were up by 2.36% in the first quarter, indicating that hedge funds slashed their holdings quite dramatically. Alyeska Investment Group, led by Anand Parekh, reported a position in King Digital Entertainment PLC (NYSE:KING) at the end of the second quarter of 1.71 million shares valued at $24.34 million. Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, was another firm reporting a position in the company as of that date, of 626,456 shares worth $8.93 million.
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Riccardo Zacconi, CEO of King Digital Entertainment PLC (NYSE:KING), said about the results, “Our second quarter 2015 gross bookings exceeded the high end of our guidance range and for the third consecutive quarter, Candy Crush Saga, Candy Crush Soda Saga and Farm Heroes Saga ranked within the top 10 grossing games in the Apple App Store and Google Play Store in the U.S.” He further discussed the latest game launched by the company, adding, “We are also pleased to have recently launched Paradise Bay, our first resource management game, and Scrubby Dubby Saga, our first game with a slider mechanic, and look forward to introducing these fresh games to our massive player base and to players around the globe.”