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SINA Corp (SINA) Q4 Earnings Match Estimates, Revenues Beat
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SINA Corp. reported fourth-quarter 2016 adjusted earnings of 27 cents per share, which came in line with the Zacks Consensus Estimate but improved 28.6% from the year-ago quarter. Net revenue of $313.4 million topped the Zacks Consensus Estimate of $307.7 million and increased 22.3% year over year.
The company posted non GAAP earnings of 63 cents per share, up 80% year over year.
Quarter Details
Advertising revenues moved up 20.8% year over year to $269.6 million. The upside was primarily driven by strength in advertising related to Weibo, partially offset by weakness in portal advertising revenues. Non-advertising revenues rose 33% year over year to $43.9 million.
Revenues from the Weibo business surged 42.8% year over year to $212.7 million. Monthly active users went up 33% year over year to 313 million, pushed by the growing number of mobile users. Daily active users were 139 million at quarter-end, up 30%.
Portal Advertising revenues decreased 5.9% year-over-year in the quarter to $100.8 million.
SINA’s non-GAAP operating margin was 26% compared with 16% reported in the prior-year quarter. The company’s operating expenses were up 41.2% year over year to $194.2 million.
Sina Corporation Price, Consensus and EPS Surprise
SINA exited the quarter with cash, cash equivalents and short-term investments of $1.8 billion, compared with $2.2 billion as of Dec 31, 2015.
Cash provided by operating activities in the quarter was $92.7 million. Capex was $21.5 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 remains a tailwind.
While the company experienced soft growth from its portal business, a company executive stated, “On the portal side, SINA has fully implemented its mobile strategy, with mobile traffic from SINA News Application growing significantly in the past twelve months." This is a big positive in our view.
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.
We also note that SINA’s shares have gained 83.74% in the past one year, vastly outperforming the Zacks categorized Computer Software-Content industry, which gained 20.63% during that period.
In the trailing four quarters, Applied Optoelectronicshas delivered an average positive earnings surprise of 106.74%.
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SINA Corp (SINA) Q4 Earnings Match Estimates, Revenues Beat
SINA Corp. reported fourth-quarter 2016 adjusted earnings of 27 cents per share, which came in line with the Zacks Consensus Estimate but improved 28.6% from the year-ago quarter. Net revenue of $313.4 million topped the Zacks Consensus Estimate of $307.7 million and increased 22.3% year over year.
The company posted non GAAP earnings of 63 cents per share, up 80% year over year.
Quarter Details
Advertising revenues moved up 20.8% year over year to $269.6 million. The upside was primarily driven by strength in advertising related to Weibo, partially offset by weakness in portal advertising revenues. Non-advertising revenues rose 33% year over year to $43.9 million.
Revenues from the Weibo business surged 42.8% year over year to $212.7 million. Monthly active users went up 33% year over year to 313 million, pushed by the growing number of mobile users. Daily active users were 139 million at quarter-end, up 30%.
Portal Advertising revenues decreased 5.9% year-over-year in the quarter to $100.8 million.
SINA’s non-GAAP operating margin was 26% compared with 16% reported in the prior-year quarter. The company’s operating expenses were up 41.2% year over year to $194.2 million.
Sina Corporation Price, Consensus and EPS Surprise
Sina Corporation Price, Consensus and EPS Surprise | Sina Corporation Quote
Balance Sheet and Cash Flow
SINA exited the quarter with cash, cash equivalents and short-term investments of $1.8 billion, compared with $2.2 billion as of Dec 31, 2015.
Cash provided by operating activities in the quarter was $92.7 million. Capex was $21.5 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 remains a tailwind.
While the company experienced soft growth from its portal business, a company executive stated, “On the portal side, SINA has fully implemented its mobile strategy, with mobile traffic from SINA News Application growing significantly in the past twelve months." This is a big positive in our view.
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.
We also note that SINA’s shares have gained 83.74% in the past one year, vastly outperforming the Zacks categorized Computer Software-Content industry, which gained 20.63% during that period.
Currently, SINA carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader tech space is Applied Optoelectronics, Inc. (AAOI - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the trailing four quarters, Applied Optoelectronicshas delivered an average positive earnings surprise of 106.74%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>