Why Tencent Music Stock Turned It Up to 11 on Tuesday
The China-based company released its second-quarter earnings to a grateful market.
It rewarded the music purveyor with a nearly 12% increase in share price.
10 stocks we like better than Tencent Music Entertainment Group ›
Investors were happy to crank Tencent Music (NYSE: TME) on Tuesday. Following the release of encouraging quarterly results by the China-based company, they sent its U.S.-traded American Depositary Shares nearly 12% higher in price on the day. That rate crushed the S&P 500 index's otherwise heartening 1.1% rise.
Music to the market's ears
In its second quarter, Tencent Music collected 8.44 billion yuan ($1.2 billion) in revenue, a strong (18%) year-over-year improvement for the company. The main driver of this growth was the take from online music services; this rose by 26% to 6.85 billion yuan ($953 million) for the period. Average revenue per user (ARPU) also headed north, rising to 11.7 yuan ($1.63) from 10.7 yuan ($1.49).
Tencent Music's net income also saw a notable increase in volume. It climbed nearly 38% higher to just under 2.5 billion yuan ($348 million), for a per-ADS figure of 1.55 yuan ($0.22).
Both headline numbers beat the average analyst estimates. Pundits tracking the company's stock were anticipating it would earn 7.97 billion yuan ($1.1 billion) for revenue and a per-ADS net profit of 1.42 yuan ($0.20).
A one-stop shop for tunes, and fortunes
In its earnings release, Tencent Music quoted executive chairman Cuisson Pang: "As we continue to scale our platform, we are focused on building a vibrant, one-stop music service destination that empowers content creators and reshapes connections with music lovers in meaningful ways."
The company did not offer any guidance in its earnings release.
Should you invest $1,000 in Tencent Music Entertainment Group right now?
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Tencent Music Stock Turned It Up to 11 on Tuesday was originally published by The Motley Fool
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