Asia's second-most valuable listed company said on Wednesday net profit for the quarter was 23.29 billion yuan ($3.66 billion), against an average estimate of 17.5 billion yuan from 11 analysts polled by Thomson Reuters.
Tencent's investors had become used to its shares going up and up, until recent months.
"The gaming business boosted Tencent's revenues in the quarter", CNBC writes. In January Tencent partnered with e-commerce companies Suning Commerce Group, JD.com and Sunac China Holdings in a 34 billion yuan investment in Wanda Commercial Properties, a Chinese retail operator, forging one of the world's biggest alliances between the new economy and bricks-and-mortar businesses.
In a statement accompanying the earnings report, Tencent Chairman and CEO Ma Huateng said, "In the first quarter of 2018, we launched the popular tactical tournament mobile games and enhanced the capabilities of widely-used services such as our Weixin Mini Programs, deepening engagement across our social, games and media platforms".
"The results were good even without the one-time gains, but the gains made it even better", said Bhavtosh Vajpayee, a Hong Kong-based research analyst at Bernstein.
Tencent's other earnings drivers included its video subscription service, which is similar to Netflix.
He added that Tencent's WeChat ecosystem gives it a unique position to take advantage of an enlarged market.
Revenue rose 48% to 73.5bn yuan, compared with analyst estimates for 70.8bn yuan. The company secured the rights to distribute both "battle royale" games in China and beyond and said it is just beginning to monetize them. PC games remained flat with 14.1 billion yuan in revenue compared to same period a year ago.
Tencent had warned in March that heavy spending could crimp profit, sending shares sharply lower.
Social networks revenues increased by 47% to RMB18.1 billion as WeChat user numbers passed 1.06 billion. Epic Games developed Fortnite.
The game has gone viral and has over 40 million monthly active users across PC and consoles.
Tencent, the world's largest videogame company, has lost nearly $90 billion of its market value since March, due to concerns about slowing growth and shrinking margins.
The drop was partly triggered by the company's warning in March that margins may be hurt by its plan to invest "aggressively" this year into areas including video content acquisition and payment subsidy.