Swedish games developer Embracer has today topped second-quarter operating profit expectations, aided by its restructuring efforts, strong licensing revenues and solid performance across business units.
Its shares jumped nearly 15% in early trading.
The group, which owns the rights to Tomb Raider and Lord of the Rings games, said its adjusted operating profit fell 14% to 1.8 billion Swedish crowns ($170.2m) in its fiscal second quarter to September, but beat analysts' forecasts of 1.62 billion in a company-provided poll.
The year-on-year decline was mainly due to a lower contribution from PC and console games, the company said.
Its Entertainment & Services unit's quarterly sales grew 13% organically, boosted by licensing revenues from the Lord of the Rings: Tales of Middle-earth trading card game in the Magic the Gathering franchise.
Embracer, like other gaming groups, had benefited from growing demand for video games during Covid-related lockdowns, but has since been hit by development delays, falling demand and a mixed reception for some of its new titles such as Payday 3.
It suffered another setback in May after a $2 billion partnership deal with an undisclosed company fell through, which led it to announce a major restructuring plan in June.
The group said the restructuring programme had resulted in a reduction of around 900 staff, or 5% of its workforce, and a discontinuation of several studios.
"Our restructuring program is making good progress, with opex savings ahead of plan and capex savings expected to contribute notably in the second half of the year," CEO Lars Wingefors said in a statement.
In total, 15 mainly unannounced projects had been written down across its subsidiaries, Embracer said.
The group reiterated its annual forecast for an adjusted operating profit of 7-9 billion Swedish crowns and net debt of 8 billion crowns.
