Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

SINA Corp. (SINA - Analyst Report) is scheduled to announce its fiscal second quarter 2012 results after market closes on Wednesday, August 15, 2012. In the run up to the earnings release we do not notice any significant change in the analyst estimates.

However, we note that SINA’s earnings lagged the Zacks Consensus Estimates in the trailing four quarters with a negative average earnings surprise of 9.7%.

Prior Quarter Highlights

SINA reported a 6.3% year-over-year increase in the top line primarily driven by higher advertising revenue. However, the company posted a loss of 21 cents, which widened from the year-ago quarter.

Including stock-based compensation but excluding one-time items, loss per share stood at 27 cents, in line with the Zacks Consensus Estimate. The weaker-than-expected result was primarily attributed to higher operating expenses in the quarter.

SINA expects non-GAAP net revenue to be between $126.0 million and $129.0 million for the second quarter of 2012, lower than the Zacks Consensus Estimate of $132.0 million.

For further details please read: SINA Reports Loss in 1Q

Estimates Trend Revision

Over the past 30 days, only one out of the eight analysts covering the stock revised the quarterly estimates upward, while no downward revision was witnessed. The Zacks Consensus Estimate for the second quarter of 2012 was pinned at a loss of 9 cents per share.

Analysts covering the stock expect weaker-than-expected online advertising spending to impact SINA’s advertising revenue for the quarter. Moreover, continued investments in Weibo may affect the company’s margins in the short-run.

Recommendation

We believe that SINA has a strong product pipeline, continuous investment in product development and marketing and a robust user base for its e-Commerce and Weibo offerings.

However, margin may suffer in the forthcoming quarters due to higher operating costs related to continuing investments on its social networking platform, Weibo. We believe that any weakness in advertising revenue will impact SINA’s ability to counter increasing operating expenses, which in turn will hurt its bottom line going forward.

Moreover, increasing competition in the domestic market from the likes of Sohu.com Inc. (SOHU - Analyst Report) and strict regulations in China remain the primary headwinds in our view.

Thus, we remain Neutral over the long term (6-12 months). Currently, SINA has a Zacks #3 Rank, which implies a Hold rating in the near term.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%