Sea shares surge 12% on revenue beat, gaming strength

Investing.com -- Sea Ltd (NYSE: SE) shares jumped 12% Thursday after the company reported fourth-quarter revenue that topped Wall Street expectations, driven by stronger-than-anticipated performance in its gaming division.

The Singapore-based technology conglomerate posted revenue of $7.1 billion for the quarter, surpassing the analyst consensus of $6.45 billion and marking a 46.6% increase from $4.8 billion in the same quarter last year. Adjusted earnings per share came in at $0.67, missing the analyst consensus of $0.76.

The revenue beat appeared to ease investor concerns about profitability as the company's investments begin to show returns. Sea's gaming unit Garena delivered results that exceeded expectations, supporting the company's overall performance.

Morgan Stanley analysts noted, "While the beat on EC is modest, it should alleviate growing investor fears on profitability with investments starting to show returns. The notable beat on Garena should support consolidated forecasts. SE's stock price is down 26% (vs. NDX +19%) in the last 3 months and the results should be supportive esp. given the low valuations."

The stock had declined 26% over the prior three months, compared to a 19% gain in the Nasdaq 100 Index, making the company's valuation relatively low heading into the earnings report.

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