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SINA Corp (SINA) Q2 Earnings & Revenues Beat Estimates
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SINA Corp. reported second-quarter 2016 adjusted earnings of 6 cents per share, which was way better than the Zacks Consensus Estimate of a loss of 1 cent and loss of 19 cents reported in the year-ago quarter. Net revenues of $244 million also topped the consensus mark of $230.4 million while growing 14.2% year over year.
Following the strong results, shares were up nearly 4.9% in the after-hours trading session yesterday. SINA also upgraded its revenue outlook for the year. The company expects 2016 revenues to be in the range of $950 million to $1 billion as against the earlier projected range of $850 million to $950 million.
Advertising revenues moved up 16.3% year over year to $205 million while Non-advertising revenues rose 4.3% year over year to $38.9 million. The upside was primarily driven by strength in advertising related to Weibo (WB - Free Report) , though it was offset partially by the weakness in portal advertising revenues.
Weibo revenues surged 36.2% year over year to $146.9 million. Monthly active users went up 33% year over year to 282 million. Daily active users for Weibo came in at 126 million at quarter-end, up 36%. The strong growth momentum of Weibo advertising was driven by increasing adoption of mobile devices and improved monetization, particularly for small and medium-sized enterprises.
Portal revenues decreased 7.4% year over year to $97.9 million. Portal Advertising revenues decreased over 11% in the quarter to $78.7 million.
Non-GAAP operating margin was 14% compared with 3% reported in the prior year quarter.
Balance Sheet and Cash Flow
SINA exited the quarter with cash, cash equivalents and short-term investments of $2.13 billion compared with $2.21 billion as of Dec 31, 2015.
Cash provided by operating activities in the quarter was $76.6 million.
Our Take
SINA has a strong product pipeline and is investing in product development and marketing. The company’s robust user base for its e-Commerce and Weibo offerings are the positives.
However, the company’s business is likely to be impacted by soft macroeconomic conditions in China. Also, significant restrictions on online search and other social-networking activities in the region remain concerns.
Moreover, Weibo is expected to face stiff competition from the likes of WeChat in China, which may hurt its user base. We believe that Weibo’s monetization ability will be a major driving factor for SINA amid intensifying competition from the likes of Sohu.com Inc. (SOHU - Free Report) and NetEase (NTES - Free Report) in the video and brand advertising market.
Currently, SINA has a Zacks Rank #3 (Hold).
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SINA Corp (SINA) Q2 Earnings & Revenues Beat Estimates
SINA Corp. reported second-quarter 2016 adjusted earnings of 6 cents per share, which was way better than the Zacks Consensus Estimate of a loss of 1 cent and loss of 19 cents reported in the year-ago quarter. Net revenues of $244 million also topped the consensus mark of $230.4 million while growing 14.2% year over year.
Following the strong results, shares were up nearly 4.9% in the after-hours trading session yesterday. SINA also upgraded its revenue outlook for the year. The company expects 2016 revenues to be in the range of $950 million to $1 billion as against the earlier projected range of $850 million to $950 million.
SINA CORP Price, Consensus and EPS Surprise
SINA CORP Price, Consensus and EPS Surprise | SINA CORP Quote
Quarter Details
Advertising revenues moved up 16.3% year over year to $205 million while Non-advertising revenues rose 4.3% year over year to $38.9 million. The upside was primarily driven by strength in advertising related to Weibo (WB - Free Report) , though it was offset partially by the weakness in portal advertising revenues.
Weibo revenues surged 36.2% year over year to $146.9 million. Monthly active users went up 33% year over year to 282 million. Daily active users for Weibo came in at 126 million at quarter-end, up 36%. The strong growth momentum of Weibo advertising was driven by increasing adoption of mobile devices and improved monetization, particularly for small and medium-sized enterprises.
Portal revenues decreased 7.4% year over year to $97.9 million. Portal Advertising revenues decreased over 11% in the quarter to $78.7 million.
Non-GAAP operating margin was 14% compared with 3% reported in the prior year quarter.
Balance Sheet and Cash Flow
SINA exited the quarter with cash, cash equivalents and short-term investments of $2.13 billion compared with $2.21 billion as of Dec 31, 2015.
Cash provided by operating activities in the quarter was $76.6 million.
Our Take
SINA has a strong product pipeline and is investing in product development and marketing. The company’s robust user base for its e-Commerce and Weibo offerings are the positives.
However, the company’s business is likely to be impacted by soft macroeconomic conditions in China. Also, significant restrictions on online search and other social-networking activities in the region remain concerns.
Moreover, Weibo is expected to face stiff competition from the likes of WeChat in China, which may hurt its user base. We believe that Weibo’s monetization ability will be a major driving factor for SINA amid intensifying competition from the likes of Sohu.com Inc. (SOHU - Free Report) and NetEase (NTES - Free Report) in the video and brand advertising market.
Currently, SINA has a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>