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Fang Holdings (SFUN) Q1 Earnings Miss, Revenues Fall Y/Y

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Fang Holdings Limited (SFUN - Free Report) reported fiscal first-quarter 2018 loss per share of a penny compared with a loss of 3 cents in the year-ago quarter. Change in fair value of equity securities affected the company’s earnings. The bottom line also missed the Zacks Consensus Estimate of earnings 4 cents.  

Total revenues of $62.8 million were down 42.8% year over year. The massive downfall can be attributed to loss in e-commerce services business.

So far this year, shares of Fang Holdings have declined 42.8% against the industry’s 2.3% rally.

 

 

Let’s check out the numbers in detail.

Revenues by Segment

Listing services segment revenues declined 21.5% year over year to $26.7 million. Decreasing number of paying members led to the downfall. The segment accounted for 42.6% of total revenues.

Marketing services segment revenues decreased 36.6% year over year to $17.3 million. Slowdown in the real estate market and continuous impact of tightening government policies weighed on segment revenues. The segment contributed 27.6% to total revenues.

E-commerce services segment revenues declined 82% year over year to $7.2 million. Segment revenues were hurt by the company’s transition to a technology-driven open platform model. The segment accounted for 11.4% of total revenues.

Financial services segment revenues increased 124.9% year over year to $5.1 million. Rise in secured consumer loans drove segment revenues. The segment contributed 8% to total revenues.

Revenue from other value-added services increased 4.1% year over year to $6.5 million, owing to growing demand for the company’s database and research services. The segment accounted for 10.4% of total revenues.

Operating Results

Gross profit decreased 13.3% from the year-ago quarter to $42.6 million. Adjusted EBITDA increased to $7.1 million from $1 million in the year-ago quarter.

Operating loss was $3.9 million compared with $6.1 million of operating loss in the prior-year quarter.

Operating expenses declined 15.8% year over year to $46.5 million. Selling expenses of $15.6 million were down 33.3% from the year-ago quarter, due to reduction in selling expenses associated with the company’s e-commerce services and advertising and promotional expenses. General and administrative expenses were $30.7 million, down 2% on a year-over- year basis.

Balance Sheet and Cash Flow

Fang Holdings had cash and cash equivalents, restricted cash (current and non-current) and short-term investments of $492.4 million compared with $547.1 million at the end of the prior quarter. Net cash used in operating activities was $7.0 million in the reported quarter.

Fiscal 2018 Outlook

For fiscal year 2018, Fang Holdings expects non-GAAP net income to be profitable.

Zacks Rank & Upcoming Releases

Fang Holdings currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the  broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Avis Budget (CAR - Free Report) , Genpact (G - Free Report)   and Delphi Technologies (DLPH - Free Report) .  While Avis Budget and Genpact will report their quarterly numbers on Aug 7, Delphi Technologies will release results on Aug 8.

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