We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
iQIYI (IQ) Q2 Loss Narrower Than Expected, Revenues Rise Y/Y
Read MoreHide Full Article
iQIYI (IQ - Free Report) reported second-quarter 2019 adjusted loss of 49 cents per ADS. The loss was narrower than the Zacks Consensus Estimate of a loss of 52 cents.
In domestic currency, the company reported loss of RMB3.22 per ADS.
Revenues increased 15% from the year-ago quarter to RMB7.11 billion ($1 billion).
As of Jun 30, 2019, total subscribers increased 57.9% year over year and hit a milestone of 100.5 million. Of this 98.9% were paid subscribers. The number of total subscribers was higher than 67.1 million as of Jun 30, 2018.
The growth was primarily driven by increase in willingness of Chinese consumers to pay for high-quality content.
iQIYI, Inc. Sponsored ADR Price, Consensus and EPS Surprise
Membership revenues surged 38% year over year to RMB3.4 billion ($497.1 million), driven by strong subscriber growth, premium content and operational initiatives taken by iQIYI.
Online advertising services revenues were RMB2.2 billion ($320.6 million), down 16% from the year-ago quarter. Revenues declined due to unfavorable “macroeconomic environment in China and slower-than-expected recovery of in-feed advertising.”
Content distribution revenues decreased 4% to RMB517.9 million ($75.4 million) due to deferred content launches during the quarter.
Other revenues were RMB979.2 million ($142.6 million), up 82%, driven by strong performance across various vertical business lines, primarily the company’s gaming business. Notably, iQIYI’s gaming business strengthened post its acquisition of Skymoons.
Operating Details
In second-quarter 2019, cost of revenues increased 14% year over year to RMB7.0 billion ($1 billion). The increase was primarily attributed to higher content costs and other cost items. Notably, content costs increased 7% to RMB5 billion ($731.9 million).
Selling, general and administrative expenses surged 42% year over year to RMB1.3 billion ($196.1 million), primarily due to increase in marketing spending and share-based compensation expenses.
Research and development expenses were RMB654.6 million ($95.4 million), up 48% primarily due to higher personnel-related compensation expenses.
Operating loss was RMB1.9 billion ($272.6 million), wider than operating loss of RMB1.3 billion million in the year-ago quarter.
Balance Sheet
As of Jun 30, 2019, cash and cash equivalents, restricted cash and short-term investments were RMB16.4 billion ($2.4 billion) compared with RMB17.9 billion ($2.7 billion) as of Mar 31, 2019.
Guidance for Q3
iQIYI expects total revenues between RMB7.21 billion ($1.03 billion) and RMB7.63 billion ($1.09 billion). The top line is expected to grow 4-10% year over year.
Long-term earnings growth rate for all the three stocks is pegged at 15%.
Legalizing THIS Could Be Even Bigger than Marijuana
Americans spend an estimated $150 billion in this industry every year… more than twice as much as they spend on marijuana.
Now that 8 states have fully-legalized it (with several more states following close behind), Zacks has identified 5 stocks that could soar in response to the powerful demand. One industry insider described the future as “mind-blowing” – and early investors can still get in ahead of the surge.
Image: Bigstock
iQIYI (IQ) Q2 Loss Narrower Than Expected, Revenues Rise Y/Y
iQIYI (IQ - Free Report) reported second-quarter 2019 adjusted loss of 49 cents per ADS. The loss was narrower than the Zacks Consensus Estimate of a loss of 52 cents.
In domestic currency, the company reported loss of RMB3.22 per ADS.
Revenues increased 15% from the year-ago quarter to RMB7.11 billion ($1 billion).
As of Jun 30, 2019, total subscribers increased 57.9% year over year and hit a milestone of 100.5 million. Of this 98.9% were paid subscribers. The number of total subscribers was higher than 67.1 million as of Jun 30, 2018.
The growth was primarily driven by increase in willingness of Chinese consumers to pay for high-quality content.
iQIYI, Inc. Sponsored ADR Price, Consensus and EPS Surprise
iQIYI, Inc. Sponsored ADR price-consensus-eps-surprise-chart | iQIYI, Inc. Sponsored ADR Quote
Top-Line Details
Membership revenues surged 38% year over year to RMB3.4 billion ($497.1 million), driven by strong subscriber growth, premium content and operational initiatives taken by iQIYI.
Online advertising services revenues were RMB2.2 billion ($320.6 million), down 16% from the year-ago quarter. Revenues declined due to unfavorable “macroeconomic environment in China and slower-than-expected recovery of in-feed advertising.”
Content distribution revenues decreased 4% to RMB517.9 million ($75.4 million) due to deferred content launches during the quarter.
Other revenues were RMB979.2 million ($142.6 million), up 82%, driven by strong performance across various vertical business lines, primarily the company’s gaming business. Notably, iQIYI’s gaming business strengthened post its acquisition of Skymoons.
Operating Details
In second-quarter 2019, cost of revenues increased 14% year over year to RMB7.0 billion ($1 billion). The increase was primarily attributed to higher content costs and other cost items. Notably, content costs increased 7% to RMB5 billion ($731.9 million).
Selling, general and administrative expenses surged 42% year over year to RMB1.3 billion ($196.1 million), primarily due to increase in marketing spending and share-based compensation expenses.
Research and development expenses were RMB654.6 million ($95.4 million), up 48% primarily due to higher personnel-related compensation expenses.
Operating loss was RMB1.9 billion ($272.6 million), wider than operating loss of RMB1.3 billion million in the year-ago quarter.
Balance Sheet
As of Jun 30, 2019, cash and cash equivalents, restricted cash and short-term investments were RMB16.4 billion ($2.4 billion) compared with RMB17.9 billion ($2.7 billion) as of Mar 31, 2019.
Guidance for Q3
iQIYI expects total revenues between RMB7.21 billion ($1.03 billion) and RMB7.63 billion ($1.09 billion). The top line is expected to grow 4-10% year over year.
Zacks Rank & Stocks to Consider
iQIYI currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader consumer discretionary sector include Crocs Inc. (CROX - Free Report) , Delta Apparel (DLA - Free Report) and Weight Watchers International (WW - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for all the three stocks is pegged at 15%.
Legalizing THIS Could Be Even Bigger than Marijuana
Americans spend an estimated $150 billion in this industry every year… more than twice as much as they spend on marijuana.
Now that 8 states have fully-legalized it (with several more states following close behind), Zacks has identified 5 stocks that could soar in response to the powerful demand. One industry insider described the future as “mind-blowing” – and early investors can still get in ahead of the surge.
See these 5 “sin stocks” now >>