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SINA Reports First Quarter 2016 Financial Results

SHANGHAI, May 11, 2016 /PRNewswire/ -- SINA Corporation (the "Company" or "SINA") SINA, +0.67% a leading online media company serving China and the global Chinese communities, today announced its unaudited financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Highlights

  • Net revenues increased 8% year over year to $198.7 million. Non-GAAP net revenues increased 8% year over year to $196.1 million.
  • Advertising revenues grew 8% year over year to $163.0 million. Non-advertising revenues were $35.7 million. Non-GAAP non-advertising revenues were $33.1 million.
  • Net income attributable to SINA was $15.3 million, or $0.22 diluted net income per share attributable to SINA. Non-GAAP net loss attributable to SINA was $2.8 million, or $0.04 non-GAAP diluted net loss per share attributable to SINA.

"We are delighted to have a good start of 2016, with Weibo continuing to show strong momentum on both operational and financial results." said Charles Chao, Chairman and CEO of SINA. "Weibo's user community and engagements kept robust growth, mainly thanks to the optimization of information feed and strong consumption of video content on the platform. On the mobile front, Weibo strengthened the leading position with over 91% of the average daily active users coming from mobile devices in March 2016. On the monetization front, advertising revenues from key accounts and small and medium enterprises (SME) customers have become the key driver of Weibo revenue growth." said Mr. Chao.

"On the portal side, our performance was largely in line with our expectation, taking seasonality factor into account. We are glad to see the positive trajectory in mobile monetization of portal, with nearly 44% of portal ad spending generated from mobile devices in this quarter." Mr. Chao added.

First Quarter 2016 Financial Resu lts

For the first quarter of 2016, SINA reported net revenues of $198.7 million, compared to $184.6 million for the same period last year. Non-GAAP net revenues for the first quarter of 2016 totaled $196.1 million, compared to $182.0 million for the same period last year.

Online advertising revenues for the first quarter of 2016 were $163.0 million, compared to $150.4 million for the same period last year. The year-over-year growth in online advertising revenues resulted from an increase of $20.1 million in Weibo advertising and marketing revenues, partially offset by a decline of $7.5 million in portal advertising revenues. Weibo's advertising revenue from Alibaba was $11.1 million, compared to $34.5 million for the same period last year, which was under a strategic collaboration agreement that expired in January 2016.

Non-advertising revenues for the first quarter of 2016 were $35.7 million. Non-GAAP non-advertising revenues for the first quarter of 2016 were $33.1 million, compared to $31.6 million for the same period last year.

Gross margin for the first quarter of 2016 was 59%, compared to 58% for the same period last year. Advertising gross margin for the first quarter of 2016 was 58%, compared to 57% for the same period last year. Non-advertising gross margin for the first quarter of 2016 was 64%, compared to 61% for the same period last year. The increase in non-advertising margin was primarily due to the decrease in revenues contributed by lower margin businesses, such as MVAS.

Operating expenses for the first quarter of 2016 totaled $126.3 million, compared to $132.5 million for the same period last year. Non-GAAP operating expenses for the first quarter of 2016 totaled $111.1 million, compared to $119.6 million for the same period last year, primarily due to the decrease in sales and marketing expenditures.

Loss from operations for the first quarter of 2016 was $8.5 million, compared to a loss of $25.2 million for the same period last year. Non-GAAP income from operations for the first quarter of 2016 was $5.6 million, compared to a non-GAAP loss from operations of $13.6 million for the same period last year as a result of operational leverage achieved by Weibo.

Non-operating income for the first quarter of 2016 was $24.3 million, compared to a non-operating income of $8.4 million for the same period last year. Non-operating income for the first quarter of 2016 mainly included 1) a one-off deconsolidation gain amounted $14.8 million as a result of disposing partial ownership in non-core business, which was measured by the amount of fair value of the interests retained in the former subsidiaries over the carrying amount of the deconsolidated assets/liabilities and non-controlling interests recognized at the date of losing control, and such gain was excluded under non-GAAP measure; 2) a $15.3 million net gain on disposing of certain investments, which is excluded under non-GAAP measure; 3) a $10.6 million loss pick-up from equity-method investments, which are accounted for under the equity-method and reported one quarter in arrears, mainly resulted from loss pick-up from the Company's investment in E-House. Non-operating income for the first quarter of 2015 mainly included $3.7 million earnings picked up from equity-method investments.

Net income attributable to SINA for the first quarter of 2016 was $15.3 million, compared to a net loss of $10.3 million for the same period last year. Diluted net income per share attributable to SINA for the first quarter of 2016 was $0.22, compared to a net loss per share of $0.18 for the same period last year. Non-GAAP net loss attributable to SINA for the first quarter of 2016 was $2.8 million, compared to a net income of $3.0 million for the same period last year. Non-GAAP net loss in the first quarter of 2016 was mainly resulting from equity loss generated by E-House. Non-GAAP diluted net loss per share attributable to SINA for the first quarter of 2016 was $0.04, compared to a net income per share of $0.04 for the same period last year.

As of March 31, 2016, SINA's cash, cash equivalents and short-term investments totaled $2.2 billion, at similar level as of December 31, 2015. For the first quarter of 2016, net cash provided by operating activities was $18.2 million, capital expenditures totaled $8.0 million, and depreciation and amortization expenses amounted to $6.6 million.

Non-GAAP Measures

This release contains the following non-GAAP financial measures: non-GAAP net revenues, non-GAAP non-advertising revenues, non-GAAP advertising and non-advertising gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) attributable to SINA and non-GAAP diluted net income (loss) per share attributable to SINA. These non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of the Company's financial performance prepared in accordance with U.S. GAAP. The Company's non-GAAP financial measures may be defined differently than similar terms used by other companies. Accordingly, care should be exercised in understanding how the Company defines its non-GAAP financial measures.

The Company's non-GAAP financial measures exclude recognition of deferred revenues in relation to the equity investment in E-House, stock-based compensation, amortization of intangible assets net of tax, adjustment for non-GAAP to GAAP reconciling items on the share of equity method investments, gain/loss on sale of investment/business, deemed disposal and impairment on investment, impairment on goodwill, adjustment for non-GAAP to GAAP reconciling items for the income (loss) attributable to non-controlling interests and amortization of convertible debt issuance cost. The Company's management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company's ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company's current financial results with the Company's past financial results in a consistent manner, and (ii) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook.

Use of non-GAAP financial measures has limitations. The Company's non-GAAP financial measures do not include all income and...


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