Perfect World Shares Soared: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese online game developer Perfect World (NAS: PWRD) jumped 21% today after the company's quarterly results impressed Wall Street.

So what: Perfect World's stock has been crushed over the past couple of years on waning demand and allegations of fraud, but a big fourth quarter -- revenue surged 32% from the year-ago period -- suggests that the worst may be behind it. Management cited strong demand for its game Zhu Xian and solid overseas growth for the blowout quarter, triggering renewed optimism over its long-term growth prospects.

Now what: Looking ahead, management expects current-quarter revenue of $112.8 million-$119.0 million. "Given the continued, successful execution of our strategy and unwavering focus on our commitments, we are confident in our ability to continue generating value for our shareholders over the long term," Chairman and CEO Michael Chi said. Given the company's status as a Chinese small cap, however, investors shouldn't expect the ride to be a smooth one.  

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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