Here’s Why The Flutter Share Price Fell 8.73% Despite Upbeat Q3 Results

Trade Flutter Shares Your capital is at risk
Simon Mugo
Updated: 2 Nov 2021

Flutter Entertainment PLC (LON: FLTR) share price fell 8.73% as investors reacted negatively to the Irish betting company lowering its annual earnings guidance despite solid Q3 2021 results.

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The betting group, which owns the Paddy Power and Betfair gambling businesses, reported excellent earnings results for the three months ended 30 September 2021, but investors largely ignored the results.

The betting group reported that its sports revenue surged 13% to £906 million in Q3 2021, while its total revenues grew 9% to £1.4 billion, which was impressive.

Flutter’s online revenues also grew 13%, driven by a 13% surge in the average number of monthly players compared to last year.

However, the bookmaker’s British and Irish revenues fell 5%, given the less busy sports calendar than last year. Still, the company registered a 19% increase in the number of recreational monthly active players.

Flutter Entertainment revealed that its Australian revenues surged 20%, driven by new lockdown measures that saw most people spend more time at home, which helped retain most of its customers.

However, its US revenues stood out after a massive 85% increase, boosted by its expansion into new states that have passed regulations to support online sports betting.

The betting group revealed that it expects more growth from its US business as it looks forwards to expanding to states that are in the process of passing legislation to support online sports gambling.

Peter Jackson, Flutter Entertainment’s CEO, said: “While a run of customer-friendly results in October have resulted in win margins being below expected levels in the quarter to date, the underlying strength of our business is clear; we have grown our online recreational player base by 46 per cent in just two years,”

Adding:

“With more international jurisdictions and US states on the path to regulation, we look forward to sustainably growing our global player base further in 2022.”

Flutter lowers its international business pretax earnings guidance for 2021 to between £1.24 billion and £1.28 billion from the previous £1.27 billion to  £1.37 billion, which triggered the share price decline.

Today’s massive decline seems like a market overreaction given Flutter’s promising growth prospects and the fact that it maintained the guidance for its US business.

*This is not investment advice.

Flutter share price.

IG chart of Flutter share price 02-11-2021
Source: IG

The flutter share price fell 8.73% to trade at 12762.5p, falling from Monday’s closing price of 13982.5p.

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