Helsinki - Rovio Entertainment
Oyj, the Finnish maker of the mobile game Angry Birds, slumped almost 40% in Helsinki trading after analysts and investors balked at its
guidance for 2018.
Rovio shares fell the most since its initial public offering in
September. The company forecast a decline in revenue for this year and
said adjusted profit would only be around 9% to 11% of
FIM, a bank, said that outlook was “hugely disappointing.”
Rovio fourth-quarter net sales of €73.9m
missed the lowest of three estimates compiled by Bloomberg. The company
relies more and more on its games unit, with licensing revenue
continuing to plummet. It also competes in a tough market in which
companies need to continuously spend more to get users to actively play
their games and buy in-game merchandise and benefits.
Rovio’s user acquisition costs more than doubled in the fourth
quarter, and were equal to 24% of its games unit revenue. Income
from Angry Birds plush toys and other use of its brand fell more than 50% last quarter and accounted for about 10% of total sales.
Ratings on Rovio shares were mostly positive this week. Four of the
five analysts tracked by Bloomberg have been advising clients to buy.
Based on their price targets, Rovio is currently more than 100%