Company Update (NASDAQ:SINA): SINA Corp Reports Third Quarter 2015 Financial Results


SINA Corp (NASDAQ:SINA), a leading online media company serving China and the global Chinese communities, today announced its unaudited financial results for the third quarter ended September 30, 2015.

Third Quarter 2015 Highlights

  • Net revenues increased 14% year over year to $226.3 million. Non-GAAP net revenues increased 14% year over year to $223.7 million.
  • Advertising revenues grew 16% year over year to $193.5 million. Non-advertising revenues were $32.8 million. Non-GAAP non-advertising revenues were $30.2 million.
  • Net income attributable to SINA was $9.8 million, or $0.16 diluted net income per share attributable to SINA. Non-GAAP net income attributable to SINA was $24.4 million, or $0.39non-GAAP diluted net income per share attributable to SINA.

“We are pleased with SINA’s overall results in the macro headwinds. For Weibo’s business, we continue to see strong performance on both operational and financial fronts. Weibo continues to be on track to execute its core strategies to grow user base and enhance user engagement, capitalize the shift to mobile, and optimize advertising offerings to better serve the ever-growing customer community at various dimensions. ” said Charles Chao, Chairman and CEO of SINA.

“For SINA’s portal business, taking macro factors into account, our performance was largely in line with our expectation. We are encouraged by the progresses we made on monetizing mobile traffic and expanding our customer community. In addition, we will persist with our business endeavor to diversify our business models and implement the vertical strategy.” Mr. Chao added.

Third Quarter 2015 Financial Results

For the third quarter of 2015, SINA reported net revenues of $226.3 million, compared to $198.6 million for the same period last year. Non-GAAP net revenues for the third quarter of 2015 totaled$223.7 million, compared to $196.0 million for the same period last year.

Online advertising revenues for the third quarter of 2015 were $193.5 million, compared to $166.8 million for the same period last year. The year-over-year growth in online advertising revenues resulted from an increase of $40.5 million in Weibo advertising and marketing revenues, partially offset by a decline of $13.8 million in portal advertising revenues.

Non-advertising revenues for the third quarter of 2015 were $32.8 million. Non-GAAP non-advertising revenues for the third quarter of 2015 were $30.2 million, compared to $29.2 million for the same period last year.

Gross margin for the third quarter of 2015 was 63%, at similar level for the same period last year. Advertising gross margin for the third quarter of 2015 was 64%, compared to 62% for the same period last year. Non-advertising gross margin for the third quarter of 2015 was 60%, compared to 67% for the same period last year. The decline in non-advertising margin was primarily due to the decrease in higher margin data licensing revenue and increase in lower margin contribution of portal’s early stage new business.

Operating expenses for the third quarter of 2015 totaled $128.6 million, compared to $135.7 millionfor the same period last year. Non-GAAP operating expenses for the third quarter of 2015 totaled$113.9 million, compared to $127.1 million for the same period last year, primarily due to the decrease in sales and marketing expenditures, decrease in general and administrative expenses, partially offset by an increase in product and development expenses.

Income from operations for the third quarter of 2015 was $14.7 million, compared to a loss of $10.9 million for the same period last year. Non-GAAP income from operations for the third quarter of 2015 was $28.4 million, compared to a non-GAAP loss of $4.0 million for the same period last year as a result of enhanced operation efficiency.

Non-operating income for the third quarter of 2015 was $4.9 million, compared to a non-operating income of $144.3 million for the same period last year. Non-operating income for the third quarter of 2015 mainly included a $5.9 million interest and other income. Non-operating income for the third quarter of 2014 was $144.3 million, which mainly included 1) a $109.2 million gain from the sale of a portion the Company’s investment in Alibaba through Yunfeng E-Commerce Funds in Alibaba’sinitial public offering; 2) a $19.2 million gain as a result of the initial public offering of Leju, a subsidiary of E-house, which had been excluded from non-operating income under non-GAAP measure.

Net income attributable to SINA for the third quarter of 2015 was $9.8 million, compared to $133.6 million for the same period last year. Diluted net income per share attributable to SINA for the third quarter of 2015 was $0.16, compared to $1.91 for the same period last year. Non-GAAP net income attributable to SINA for the third quarter of 2015 was $24.4 million, compared to $13.1 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA for the third quarter of 2015 was $0.39, compared to $0.19 for the same period last year.

As of September 30, 2015, SINA’s cash, cash equivalents and short-term investments totaled $1.9 billion, compared to $2.2 billion as of December 31, 2014. The decrease in cash, cash equivalents, and short-term investments was mainly due to the share buyback completed in May 2015 and investments made in the past three quarters of 2015. For the third quarter of 2015, net cash provided by operating activities was $107.1 million, capital expenditures totaled $6.7 million, and depreciation and amortization expenses amounted to $8.8 million.

Other Developments

On November 6, 2015, the Company completed an issuance of 11,000,000 ordinary shares to a special purpose vehicle owned by Mr. Charles Chao, Chairman and CEO of the Company, for an aggregate price of $456,390,000, pursuant to a legally binding subscription agreement previously announced on June 1, 2015. The per share purchase price of US$41.49 represents the average closing trading price of SINA’s ordinary shares for the 30 trading days ended May 29, 2015, the last trading day before the signing of the subscription agreement. The shares acquired in this transaction are subject to a contractual lock-up restriction for six months after the closing on November 6, 2015.

On November 6, 2015, the Company held its annual general meeting of shareholders, where the shareholders re-elected Mr. Yan Wang and Mr. Song-Yi Zhang as directors of SINA. The shareholders also approved and ratified the appointment of PricewaterhouseCoopers Zhong Tian LLP as the Company’s independent auditors for the fiscal year ending December 31, 2015. (Original Source)

Shares of Sina are up 4.25% to $52.50 in after-hours trading. SINA has a 1-year high of $61.25 and a 1-year low of $31.92. The stock’s 50-day moving average is $45.99 and its 200-day moving average is $44.69.

On the ratings front, Sina has been the subject of a number of recent research reports. In a report issued on August 19, Piper Jaffray analyst Gene Munster maintained a Buy rating on SINA, with a price target of $55, which represents a potential upside of 9.2% from where the stock is currently trading. Separately, on the same day, Brean Murray Carret’s Fawne Jiang maintained a Buy rating on the stock and has a price target of $50.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Gene Munster and Fawne Jiang have a total average return of 23.5% and 5.2% respectively. Munster has a success rate of 67.4% and is ranked #1 out of 3849 analysts, while Jiang has a success rate of 45.1% and is ranked #886.

SINA Corp is an online media company and MVAS provider in the People’s Republic of China and for the Chinese communities.