- Drop in Canadian dollar hurts spending power of customers
- PokerStars business faces restrictions in numerous countries
Amaya Inc. fell as much 35 percent after the company, the owner of PokerStars, reported third-quarter results that missed estimates and lowered its forecast for the rest of the year.
Shares of the world’s largest online poker company were down 29 percent to $16.71 at 12:14 p.m. in New York, after falling as low as $15.25. The company, based in Montreal, said it will earn C$345 million to C$365 million this year, or C$1.66 to C$1.75 per share, excluding some items. Previously it had projected profit of C$367 million to C$415 million, of C$1.76 to C$2 per share.
The strengthening U.S. dollar has reduced the purchasing power of customers by 19 percent, the company said. Another factor impacting sales was a decision to delay a sports-betting product that needed improvement before its release, Chief Executive Officer David Baazov said in the statement Tuesday.
Sales for the year will be between C$1.29 billion and C$1.34 billion, down from the C$1.45 billion to C$1.56 billion projected earlier, the company said. That suggests a maximum of C$357.4 million in fourth-quarter sales, below the C$426.6 million average estimate of five analysts.
Amaya bought Isle of Man-based PokerStars in a $4.9 billion deal last year. The company has since exited more than 30 markets where the legality of the business was unclear. The third quarter-results were hurt by the suspension of operations in Portugal, where a new licensing regime is being implemented. The company also took a write-off on its business in Greece, where the economic downturn and banking restrictions have hurt betting.
The number of active PokerStars players fell 3 percent to 2.2 million in the third quarter from a year earlier, the company said.