Tencent announces stock buyback after Q4 revenue miss

Tencent Holdings (TCEHY) has announced plans for a stock buyback program after missing revenue expectations in its fourth quarter results. The company attributed a portion of the revenue slump to a slowdown in its gaming revenue segment, which has traditionally been a significant growth driver.

Yahoo Finance's Rachelle Akuffo and Akiko Fujita break down the details.

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Editor's note: This article was written by Angel Smith

Video Transcript

RACHELLE AKUFFO: We want to shift gears and look at Tencent Holdings reporting its fourth quarter results, and that's despite missing revenue expectations and suffering a slowdown in its gaming business. Looking at shares here just edging slightly higher after the company plans to more than double its stock buyback program, and this is something we've been continuing to see here with a lot of companies sort of announcing some-- some issues when it comes to slowdowns and some of their key industries here and coupling that with the stock buyback as well to perhaps shore up confidence in terms of the product roadmap ahead. Akiko.

AKIKO FUJITA: Yeah, you're certainly right about that. Tencent, certainly one of those companies that have not just been affected by the slowdown broadly that we've seen in China but also around investor concerns around regulation in the gaming sector. Remember, Tencent, the largest gaming player here. When you think back to the announcements that were made last year about setting limits on the amount of time that gamers can play but also the number of awards essentially, that would be limited there.

There was a huge, huge sell-off back in December on the back of that announcement with Tencent, specifically out of investor concern this could really affect the revenue picture. Tencent reassuring investors today on the call that that's not necessarily the case that they think that this is actually a positive, whether that's a spin or not. We are seeing Tencent shares bouncing back there about 1%.

RACHELLE AKUFFO: Indeed, and they talked about some of that gaming revenue. Announced some new games coming up in the pipeline as well. But obviously, a lot of people did buy invest-- buy and invested a lot of these games during COVID. Haven't really felt the need to keep splashing out on some of these games. So we'll continue to keep an eye on that gaming market and what we see from Tencent.