SINA Corporation reported fourth-quarter 2019 non-GAAP earnings of $1.17 per share, beating the Zacks Consensus Estimate by 185.4%. The figure also increased 46.3% from the year-ago quarter.
Non-GAAP net revenues increased 4% year over year to $590.7 million. At constant currency (cc), non-GAAP revenues increased 5% year over year. The Zacks Consensus Estimate for revenues was pegged at $561 million.
Quarter Details
Advertising revenues (77.7% of revenues) decreased 4.8% year over year to $460.8 million due to decline in Weibo and portal advertising revenues.
Non-advertising revenues (22.3% of total revenues) climbed 49.3% year over year (up 51% at cc) to $129.8 million. This upside was driven by higher revenues generated from the company’s fin-tech businesses.
Sina Corporation Price, Consensus and EPS Surprise
Revenues from the Weibo business decreased 2.9% year over year to $468.2 million. Notably, Weibo’s user community base surpassed 500 million with EMEA reaching 560 million in December 2019, adding around 54 million users on a year-over-year basis. Average daily active users (DAUs) reached 222 million in December 2019.
Weibo’s advertising & marketing revenues were down 2.7% year over year (down 1% at cc) to $405.9 million. Weibo’s VAS revenues declined 4% to $62.2 million.
Weibo’s key accounts business decreased 7% (down 6% at cc) due to reduction of handset shipments, which negatively impacted key accounts growth in the reported quarter.
Revenues from the portal business increased 41.7% year over year to $134.2 million. Portal advertising revenues decreased 16.2% year over year to $56.5 million due to lower ad spending by SME customer as well as certain brand industries such as automobile and Internet services.
Other revenues increased to $77.7 million from $27.3 million reported in the year-ago quarter.
Operating Details
SINA reported fourth-quarter non-GAAP gross profit of $457.7 million, up 2.1% year over year. Non-GAAP gross margin of 77.2% contracted 109 basis points (bps) on a year-over-year basis.
Non-GAAP advertising gross margin shrunk 100 bps to 82%. Non-GAAP non-advertising gross margin was 63%, up from the year-ago quarter’s 56%, benefiting from better gross margin profile of SINA’s fintech business.
Sales and marketing expenses were $165.4 million, down 13.5% year over year. However, general and administrative expenses increased to $177.4 million from $30.63 million reported in the year-ago quarter. Moreover, product development expenses were $95.6 million, reflecting an increase of 12%.
Operating expenses (47.7% of revenues) on a non-GAAP basis came in at $282.8 million, down 2% year over year.
Non-GAAP operating income was $174.9 million, up 9.5% year over year. Non-GAAP operating margin of 29.4% expanded 160 bps year over year.
On Dec 31, 2019, SINA board of directors authorized a share repurchase program per which the company may repurchase up to $500 million of its ordinary shares over the next 12 months.
Balance Sheet and Cash Flow
As of Dec 31, 2019, SINA's cash, cash equivalents and short-term investments were $2.9 billion, which remained flat on a sequential basis.
While net cash provided by operating activities was $301.7 million in the fourth quarter, capital expenditures totaled $8.5 million.
Zacks Rank & Stocks to Consider
Currently, SINA carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader technology sector include Dropbox, Inc. (DBX - Free Report) , Stamps.com Inc. and ManTech International Corporation , each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Dropbox, Stamps.com and ManTech is currently projected to be 22.2%, 15% and 8%, respectively.
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SINA Corporation reported fourth-quarter 2019 non-GAAP earnings of $1.17 per share, beating the Zacks Consensus Estimate by 185.4%. The figure also increased 46.3% from the year-ago quarter.
Non-GAAP net revenues increased 4% year over year to $590.7 million. At constant currency (cc), non-GAAP revenues increased 5% year over year. The Zacks Consensus Estimate for revenues was pegged at $561 million.
Quarter Details
Advertising revenues (77.7% of revenues) decreased 4.8% year over year to $460.8 million due to decline in Weibo and portal advertising revenues.
Non-advertising revenues (22.3% of total revenues) climbed 49.3% year over year (up 51% at cc) to $129.8 million. This upside was driven by higher revenues generated from the company’s fin-tech businesses.
Sina Corporation Price, Consensus and EPS Surprise
Revenues from the Weibo business decreased 2.9% year over year to $468.2 million. Notably, Weibo’s user community base surpassed 500 million with EMEA reaching 560 million in December 2019, adding around 54 million users on a year-over-year basis. Average daily active users (DAUs) reached 222 million in December 2019.
Weibo’s advertising & marketing revenues were down 2.7% year over year (down 1% at cc) to $405.9 million. Weibo’s VAS revenues declined 4% to $62.2 million.
Weibo’s key accounts business decreased 7% (down 6% at cc) due to reduction of handset shipments, which negatively impacted key accounts growth in the reported quarter.
Revenues from the portal business increased 41.7% year over year to $134.2 million. Portal advertising revenues decreased 16.2% year over year to $56.5 million due to lower ad spending by SME customer as well as certain brand industries such as automobile and Internet services.
Other revenues increased to $77.7 million from $27.3 million reported in the year-ago quarter.
Operating Details
SINA reported fourth-quarter non-GAAP gross profit of $457.7 million, up 2.1% year over year. Non-GAAP gross margin of 77.2% contracted 109 basis points (bps) on a year-over-year basis.
Non-GAAP advertising gross margin shrunk 100 bps to 82%. Non-GAAP non-advertising gross margin was 63%, up from the year-ago quarter’s 56%, benefiting from better gross margin profile of SINA’s fintech business.
Sales and marketing expenses were $165.4 million, down 13.5% year over year. However, general and administrative expenses increased to $177.4 million from $30.63 million reported in the year-ago quarter. Moreover, product development expenses were $95.6 million, reflecting an increase of 12%.
Operating expenses (47.7% of revenues) on a non-GAAP basis came in at $282.8 million, down 2% year over year.
Non-GAAP operating income was $174.9 million, up 9.5% year over year. Non-GAAP operating margin of 29.4% expanded 160 bps year over year.
On Dec 31, 2019, SINA board of directors authorized a share repurchase program per which the company may repurchase up to $500 million of its ordinary shares over the next 12 months.
Balance Sheet and Cash Flow
As of Dec 31, 2019, SINA's cash, cash equivalents and short-term investments were $2.9 billion, which remained flat on a sequential basis.
While net cash provided by operating activities was $301.7 million in the fourth quarter, capital expenditures totaled $8.5 million.
Zacks Rank & Stocks to Consider
Currently, SINA carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader technology sector include Dropbox, Inc. (DBX - Free Report) , Stamps.com Inc. and ManTech International Corporation , each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Dropbox, Stamps.com and ManTech is currently projected to be 22.2%, 15% and 8%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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