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SINA Corp's (SINA) Q3 Earnings and Revenues Increase Y/Y

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SINA Corporation reported third-quarter 2019 non-GAAP earnings of 94 cents per share, beating the Zacks Consensus Estimate by 30.6%. The figure also increased 1.1% from the year-ago quarter.

Non-GAAP net revenues inched up 1% year on year to $558.8 million. At constant currency (cc), non-GAAP revenues increased 5% year over year. The Zacks Consensus Estimate for revenues was pegged at $563 million.

Quarter Details

Advertising revenues (82.1% of revenues) decreased 4.7% year over year to $461.1 million due to a decline in portal advertising revenues.

Non-advertising revenues (17.9% of total revenues) climbed 36.7% year over year (up 43% at cc) to $100.4 million. This upside was driven by robust performance in Weibo's live streaming business and higher revenues generated from the company’s fin-tech businesses.

Sina Corporation Price, Consensus and EPS Surprise

Sina Corporation Price, Consensus and EPS Surprise

Sina Corporation price-consensus-eps-surprise-chart | Sina Corporation Quote

Revenues from the Weibo business grew 1.7% year over year to $467.8 million, driven by solid user growth with monthly active users (MAU) reaching 497 million in September and the average daily active users (DAUs) reaching 216 million.

Weibo’s advertising & marketing revenues were up 0.8% year over year (up 5% at cc) to $412.5 million. Weibo’s VAS revenues jumped 8.6% to $55.3 million.

Revenues from the portal business edged down 0.8% year over year to $100.5 million. Portal advertising revenues plunged 32.8% year over year to $50.1 million due to lower ad spending by SME customers. Other revenues surged 88.5% to $50.4 million.

Operating Details

SINA reported a third-quarter non-GAAP gross profit of $444.9 million, up 0.9% year over year. Non-GAAP gross margin of 79.3% contracted 50 basis points (bps) on a year-over-year basis.

Non-GAAP advertising gross margin shrunk 100 bps to 83%. Non-GAAP non-advertising gross margin was 62%, down from year-ago quarter’s 70%.

Sales and marketing expenses were $169.4 million, down 8.7% year over year. Moreover, general and administrative expenses flared up 58.1% to $44.9 million. However, product development expenses were $91.2 million, reflecting a decrease of 0.4%.

Operating expenses (48.9% of revenues) on a non-GAAP basis came in at $274.9 million, down 0.5% year over year.

Non-GAAP operating income was $170 million, up 1.1% year over year. Non-GAAP operating margin was 30%, flat year over year.

Balance Sheet and Cash Flow

As of Sept 30, 2019, SINA's cash, cash equivalents and short-term investments were $2.9 billion compared the $2.15 billion reported in the previous quarter.

While net cash provided by operating activities was $220.2 million in the third quarter, capital expenditures totaled $6 million.

Zacks Rank & Other Key Picks

Currently, SINA carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the broader computer & technology sector include Alteryx , NetEase (NTES - Free Report) and Fortinet (FTNT - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Alteryx, NetEase and Fortinet is 39.9%, 31.9% and 14%, respectively.


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