King delivers the candy for investors as it beat Q3 earnings expectations

The candy keeps on rolling for King.

King Digital Entertainment, the social-mobile game publisher that has ruled mobile gaming with Candy Crush Saga, reported third-fiscal quarter earnings and revenues that beat Wall Street’s expectations today.

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But the trick with King’s financial performance is whether it can grow the revenues of its new games to make up for an inevitable decline in Candy Crush Saga, which has been one of the most successful mobile gaming in history. Last quarter, Candy Crush Saga revenues were an estimated 59 percent of total revenues. In the latest quarter, non-Candy Crush Saga games grew to 49 percent of revenues, compared to 41 percent the previous quarter. In after-hours trading, King’s stock is up 5 percent to $13.90 a share.

King, which is based in London and incorporated in Dublin, reported earnings per share of 56 cents on gross bookings of $543.9 million. Analysts had estimated King would report non-GAAP earnings per share of 47 cents on gross bookings of $495 million. King itself expected gross bookings of $500 million to $525 million for the third-fiscal quarter.

“With the launch of two new mobile games during the third quarter as well as the Facebook version of Candy Crush Soda Saga last month, we are continuing to execute on our strategy to develop a portfolio of games for our massive network of players,” said King CEO Riccardo Zacconi in a statement. “We have a consistent track record of developing successive hit games and as a result, have increased our non-Candy Crush Saga gross bookings to $264 million in third quarter 2014.

“If annualized, this represents more than a $1 billion run rate, and makes our non-Candy Crush Saga business larger than [almost] every other mobile gaming company. In addition, the board’s authorization of a $150 million share repurchase program underscores our confidence in the strength of our company.”

King now has more than 495 million monthly active player for all of its game on mobile, social, and the Web, compared to 361 million a year ago. King’s key metrics for overall users peaked in the first calendar quarter, and it had a slight decline in the second quarter as monetization for Candy Crush Saga slipped during the summer. King went public in March at $22.50 a share and a valuation of $6 billion. More recently, it has been trading at $13 a share and a value of $4.2 billion.

Michael Pachter, an analyst at Wedbush Securities, said in a note before the call that he believes Candy Crush Saga itself would hit $250 million in bookings in the third fiscal quarter.

Earlier this year, King cut its full-year revenue guidance based on the view that Candy Crush Saga revenues would decline at some point. Adam Krejcik, an analyst at Eilers Research, said in a note before the call that he expected Candy Crush Saga bookings to decline 20 percent in the third-fiscal quarter compared to the previous quarter.

Even as Candy Crush declines in revenue, it is still holding high in the charts. During the third-fiscal quarter, King said it had four games in the top 15 grossing games on the Apple iTunes App Store and the Google Play store in the U.S.

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On iOS and Google Play, for instance, Candy Crush is still No. 2 on the top-grossing charts for mobile apps, second only to Supercell’s Clash of Clans. On iOS, King has four games in the top-20 grossing list today: Candy Crush Saga at No. 2, Farm Heroes Saga at No. 5, Pet Rescue Saga at No. 13, and Bubble Witch 2 Saga at No. 18. Candy Crush Soda Saga, which launched on Facebook on Oct. 20, is expected to be a key driver in the future, Krejcik said.

On mobile devices, King’s rivals include Electronic Arts, Supercell, Glu Mobile, and Machine Zone.