Sina Earnings: Beats Analyst Estimate on Profit and Revenues, Shares Pop

Rising costs hurt Sina Corporation (NASDAQ:SINA) in the first quarter as profit dropped from a year earlier. SINA is an online media company and mobile value-added information service provider in the People’s Republic of China and the global Chinese communities.

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Sina Earnings Cheat Sheet for the First Quarter

Results: Net income for Sina Corporation fell to $14.1 million (21 cents per share) vs. $15 million (23 cents per share) a year earlier. This is a decline of 5.8% from the year-earlier quarter.

Revenue: Rose 6% to $106.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Sina Corporation beat the mean analyst estimate of a loss of 27 cents per share. It beat the average revenue estimate of $102.6 million.

Quoting Management: “Our brand advertising business got off to a relatively slow start in the first quarter due to the softening of macroeconomic conditions in China,” said Charles Chao, CEO of SINA. “Although we expect macroeconomic headwinds to continue into the second quarter, we have begun test trials of Weibo brand advertising, which is powered by a social interest graph recommendation engine, and expect this new product offering to have a meaningful impact on our brand advertising business in the second half of this year. The initial feedback from advertisers on our Weibo advertising is encouraging, and we believe it is critical that SINA continues its significant investments in social media and related initiatives,” Mr. Chao added.

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell seven percentage points from the year-earlier quarter to 46.2%. In that span, margins have contracted an average of 3.6 percentage points per quarter on a year-over-year basis.

Revenue has increased for four consecutive quarters. Revenue increased 21.3% to $133.4 million in the fourth quarter of the last fiscal year. The figure rose 20.4% in the third quarter of the last fiscal year from the year earlier and climbed 19.7% in the second quarter of the last fiscal year from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the fourth quarter of the last fiscal year with net income of 13 cents versus a mean estimate of net income of 16 cents per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the second quarter is 2 cents per share, down from 25 cents ninety days ago. The average estimate for the fiscal year is 14 cents per share, down from $1.04 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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