Sina narrows Q1 loss on wider margins
Source: totaltelecom View: 236 Date: 2013-05-20

Sina Corp.’s first-quarter loss narrowed as margins widened at the Chinese Internet company, which also reported a surprise core profit.

Shares rose 4.2% to $61.29 after hours as the company offered a second-quarter revenue view that topped consensus estimates.

For the current quarter, Sina expects adjusted revenue, excluding the impact of deferred-license revenue, of $143 million to $147 million, above the $141 million estimated by analysts polled by Thomson Reuters.

The company has a large user base, with China’s growing middle class flocking to its Internet portal and its popular microblogging site Weibo. Sina has said it continues to see strong user growth, despite tighter government restrictions on Weibo. The company has also struggled with rising costs and with figuring out how to make money from Weibo.

Last month, e-commerce giant Alibaba Group Holding Ltd. said it struck a $586 million deal with Sina that would give it an 18% stake in Weibo. It also won an option to increase its stake to 30% at an unspecified price. Sina said the alliance should generate about $380 million of revenue from advertising and social commerce services for Weibo over the next three years.

In the latest quarter, Sina posted a loss of $13.2 million, or 20 cents a share, compared with a year-earlier loss of $13.7 million, or 21 cents a share. Excluding stock-based compensation and other items, the company reported a per-share profit of two cents, compared to a year-ago loss of 21 cents. Analysts had estimated a per-share loss of five cents.

Net revenue grew 19% to $126 million. Adjusted revenue, which excludes the impact of deferred-license revenue, rose 19% to $121.3 million, topping the company’s February forecast of adjusted revenue of $115 million to $119 million.

Gross margin widened to 51.3% from 46.2%.

Advertising revenue rose 20% to $94.3 million, while nonadvertising revenue climbed 14% to $31.7 million.

The stock is up 30% over the past six months.

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