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Candy Crush creator King Digital's profit falls 28 percent

Mascots dressed as characters from the mobile video game ”Candy Crush Saga” pose outside the New York Stock Exchange March 26, 2014.

Reuters/Brendan McDermid

King Digital Entertainment Plc (KING.N), the creator of Candy Crush Saga, reported a 28 percent drop in quarterly profit as monthly unique users fell slightly and a strong dollar dented sales from outside the United States.

The company’s shares slipped 8.2 percent in extended trading on Thursday.

King Digital, which makes games for social media websites and mobile devices, has struggled to boost bookings, an indicator of future revenue, as it only began launching new games toward the second half of the year.

Gross bookings fell 13 percent to $529 million in the second quarter ended June 30. Excluding the impact of changes in foreign exchange rates, gross bookings would have fallen by about 6 percent.

Still, this beat the average analyst estimate of $513.1 million, according to market research firm Factset StreetAccount.

In the quarter, 81 percent of gross bookings were derived from mobile users, a 7 percent decline from a year earlier.

Rival Zynga Inc (ZNGA.O), known for “FarmVille” and “Mafia Wars” games, forecast current-quarter bookings well below estimates last week as the company expects to launch some games only in the fourth quarter.

King Digital’s monthly unique users (MUUs) fell 1 percent to 340 million in the second quarter. Sequentially, the number was down 7 percent.

“The sequential decrease in MUUs was reflected in both Web and mobile, but at a greater rate of decline on Web, which we believe is due to a continuing decline in overall Facebook desktop users,” King Digital said in a statement.

Net income fell to $119.3 million, or 38 cents per share, in the second quarter ended June 30 from $165.4 million, or 52 cents per share, a year earlier.

On an adjusted basis, King Digital earned 49 cents per share. Revenue fell 17.5 percent to $489.5 million.

Analysts on average had expected the company to earn 43 cents per share on revenue of $490 million, according to Thomson Reuters I/B/E/S.

(Reporting by Devika Krishna Kumar in Bengaluru; Editing by Sayantani Ghosh and Saumyadeb Chakrabarty)

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