Changyou Q3 Profit Falls, CEO Resigns

(RTTNews) - Chinese online games developer Changyou.com Ltd. (CYOU) Monday recorded a sharp decline in third-quarter profit on higher expenses on employees and costs related to launch of new games. The company also said its Chief Executive Officer Tao Wang resigned due to personal reasons, and that he will continue to be a director.

Net income fell to $3.32 million or $0.06 per ADS, from $72.83 million or $1.36 per ADS in the previous year. Excluding share-based compensation expense, the company reported a profit of $3.84 million or $0.07 per ADS.

On average, seven analysts polled by Thomson-Reuters estimated a loss of $0.06. Analysts' estimates typically exclude one-time items.

Total revenues reduced slightly to $180.82 million from last year's $183.07 million, hurt by a decline of about $3.5 million in its core online gaming revenues. Analysts projected revenues to be $188.51 million. Total operating costs surged to $133.05 million from $71.43 million last year.

Looking ahead, the company expects fourth-quarter revenues of $188 million to $198 million, and online gaming revenues of $155 million to $165 million. Analysts see fourth-quarter revenues of $199.2 million.

Carol Yu, president and chief financial officer of Sohu.com Inc.(SOHU), and Dewen Chen, president, will function as Co-CEOs, the company said. Yu will continue her position as president and CFO of Sohu, in addition to the new position.