2023-08-14 17:25:17 ET
Singapore-based tech firm Sea Limited ( NYSE: SE ) is set to report its second-quarter results on Tuesday before markets open, with investors scrutinizing the improvement in its profitability.
Wall Street expects Sea to post Earnings Per Share (EPS) of $0.71. Revenue is expected to rise more than 10% to $3.25 billion.
Although the company posted positive earnings for its first quarter, it still missed analyst’ estimate by a wide margin due to a one-time charge of $117.9 million related to prior acquisition.
“The ability to generate rapid revenue growth is undoubtful, but profitability metrics were historically unstable,” said Seeking Alpha analyst Dair Sansyzbayev .
Investors will also keep an eye on its gaming unit, which remains under pressure as demand for videogames started to taper off in the post-pandemic era. Revenue for the unit declined more than 50% in the previous quarter.
A recent Seeking Alpha analysis by Julian Lin pointed out that the digital entertainment business or gaming unit does not appear to be stabilizing and cash flows from this segment may continue to dwindle.
However, continued growth in its e-commerce and digital financial services segment will likely be a catalyst for the company.
Over the last two years, Sea has beaten EPS and revenue estimates 50% and 88% of the time respectively.
Seeking Alpha analysts and Wall Street rated the stock a “buy”, while Seeking Alpha’s Quant ratings considers it a “hold” with a score of 2.68. The stock has gained over 6% so far this year.
Over the last three months, EPS estimates have seen two upward revisions and two downward revisions. Revenue estimates have seen two upward revisions, compared to four downward moves.
More on sea Ltd
- Sea Limited: A Mouthwatering Prospect Ahead Of Q2 Earnings
- Sea Limited: Why I'm Not Overly Excited About Investing Despite Recent Profitability
- Sea Limited: Stellar Revenue Growth But Profitability Timing Under Question
- Sea Ltd plunges 17% as Q1 earnings miss estimates despite e-commerce strength
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Investors' eye on profitability during Sea Ltd’s Q2 Earnings