Sea (SE) Shares Soar 12% on Better-than-feared Results

May 17, 2022 9:33 AM EDT
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Price: $71.89 --0%

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Shares of Sea Ltd (NYSE: SE) are up almost 12% in premarket trading Tuesday after the company reported better-than-expected results.

Sea reported a loss per share of $1.04, compared to the estimated loss per share of $1.15. Revenue came in at $2.9 billion to top the expected $2.8 billion consensus. Sea generated $1.5 billion in revenue from e-commerce operations, while analysts were projecting $1.7 billion in e-commerce revenue.

Digital entertainment revenue stood at $1.14 billion, topping the consensus estimates of $927.3 million. The company reported an adjusted EBITDA loss of $509.9 million, compared to an $88.1 million profit in the same period last year, while analysts were expecting a loss of $506.2 million.

Sea Ltd expects e-commerce revenue in the range of $8.5 billion to $9.1 billion, up from its previous forecast of $8.9 billion to $9.1 billion, compared to the analyst expectations of $8.95 billion.

"We recorded solid results across our business in the first quarter of 2022, despite challenging comparisons to the same period last year during heightened COVID-related restrictions,” said Forrest Li, Sea's Chairman and Group Chief Executive Officer.

"As a result, we are well on track to achieve our previously shared projections of profitability in our Asia markets, while continuing to scale our businesses and capture market share globally.”

Citi analyst Alicia Yap said Sea delivered better-than-feared results, “especially on outperformance of digital entertainment” revenue. She added that the management’s commentary on adjusted EBITDA profitability in 2023 is encouraging.

Jefferies analyst Thomas Chong also said Sea delivered better-than-expected results but also took note of revised e-commerce revenue guidance.

By Senad Karaahmetovic

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