Updated at 9:35 am EST
DraftKings (DKNG) – Get DraftKings Inc Class A Report shares slumped lower Friday posted stronger-than-expected fourth quarter earnings but forecast a much wider loss over the coming year for the online sports betting and gaming group.
DraftKings said revenues for the three months ending in December rose 47% from last year to $473 million as more states eased restrictions on online gaming. Marketing and expansion costs, however, ate into the group’s bottom line, which came in at $128 million.
Looking into its 2022 financial year, DraftKings said it sees overall revenues of around $1.9 billion at the mid-point, a solid boost from its prior forecasts linked to the launch of mobile sports betting in New York and Louisiana earlier this year, with a much wider-than-expected adjusted loss range of between $825 million and $925 million, up from $676 million over the whole of 2021.
If state legalization trends continue, however, DraftKings said it expects to turn a profit by the fourth quarter of next year.
“DraftKings’ strong fourth quarter performance exceeded our expectations on the top and bottom line,” said CEO Jason Robins “Our excellent quarter capped off a year in which five of our states were Contribution Profit positive, further demonstrating the effectiveness of our state playbook and supporting our positive view of the industry’s TAM. We enter 2022 positioned to grow our market share, further optimize our user experience and continue to strengthen our multi-product suite of offerings.”
DraftKings shares were marked 13.2% lower in early trading Friday to change hands at $19.15 each, a move that would extend the stock’s six-month decline to around 63%.
“Considering profitability is one of the major headwinds around sentiment (and the’22 guide is below the street) this seems like an important indicator that the model is working,” said Credit Suisse analyst Benjamin Chaiken.
Source: https://www.thestreet.com/markets/draftkings-stocks-dives-after-q4-earnings-beat-2022-profit-guide?puc=yahoo&cm_ven=YAHOO&yptr=yahoo