By Jesus Calero and Marie Mannes

STOCKHOLM (Reuters) – Swedish games developer Embracer on Thursday reported slightly weaker than expected operating profit for the April to June period but reiterated its full-year guidance, saying its restructuring programme was on track.

Adjusted operating profit for the fiscal first quarter stood at 1.67 billion Swedish crowns ($152.75 million), lagging the 1.78 billion forecast in a company-provided poll of analysts, but up from 1.32 billion crowns a year ago.

Shares in the games developer were up 6.8% at 1026 GMT, sitting at the top of European 600 index.

Analysts said the company had made good progress towards its financial targets and cited revenues from some blockbusters.

Redeye analyst Viktor Lindstrom said revenues from Lord of The Rings games, for which the company bought intellectual property rights last year, had helped to drive some “stronger sales than expected”.

CEO Lars Wingefors told Reuters he was confident in the underlying demand in the market, citing the success of the newly-released Remnant II game as part of the reason for the strong start to its second quarter, which began in July.

“Overall, we feel more confident about our delivery of our adjusted EBIT guidance for the year because of the over performance,” Wingefors said.

After a boost linked to COVID-19 lockdowns that drove demand for gaming, the company has had a difficult year with development delays and a poor reception for some of its new games.

In addition, a $2 billion partnership it had called “ground-breaking” fell through in May, sending the company’s shares down 45% and helping to drive the company to announce a major restructuring in June, which it said on Thursday was on track.

($1 = 10.9332 Swedish crowns)