CNBC headline: Tencent, the $370 billion Chinese tech giant, posts first ever revenue decline
PUBLISHED WED, AUG 17 20224:51 AM EDTUPDATED 13 MIN AGO
Tencent posted its first ever quarterly year-on-year revenue decline as stricter regulations around gaming in China and a resurgence of Covid-19 in the world’s second-largest economy hit the technology giant.
Tencent posted revenue of 134.03 billion Chinese yuan ($19.78 billion) in the second quarter vs. 134.6 billion yuan expected, a decline of 3% year-on-year.
Tencent missed both revenue and profit forecasts. During the quarter, Tencent faced macroeconomic headwinds stemming from a resurgence of Covid in China and subsequent lockdowns of major cities, including the financial metropolis of Shanghai. Authorities have committed to a “Zero Covid” policy which has caused disruptions across the world’s second-largest economy.
China’s economy grew just 0.4% in the second quarter, missing analyst expectations. That had an impact on the company’s fintech, cloud and advertising revenue.
Meanwhile, China’s domestic video games industry has also faced challenges due to stricter regulation. Tencent makes about a third of its total revenue from gaming.
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