NQ Mobile In Loss; Proposes To Sell FL Mobile To Tack Fiori For Up To $630 Mln

(RTTNews) - NQ Mobile Inc (NQ), the maker of mobile security software, on Thursday reported a wider loss for the third quarter, despite an increase in revenues, hurt by expenses. Going forward, the company lifted its outlook for the full year.

Also NQ Mobile said it entered into a non-binding memorandum of understanding with Tack Fiori International Group Ltd, under which Tack Fiori proposes to buy NQ's subsidiary FL Mobile for between $570 million and $630 million.

NQ Mobile shares gained about 20 percent in after-hours trade on the New York Stock Exchange, following the announcement.

Detailing the MOU with Tack Fiori, NQ Mobile said the deal consideration would be payable by way of allotment and issue of certain number of new shares of Tack Fiori at an issue price per new share which shall represent a discount of 10% to 20% to the average closing price per share of Tack Fiori as quoted on the Hong Kong Stock Exchange for the last thirty consecutive trading days up to and including the day immediately prior to the date of the MOU to NQ Mobile and other shareholders of FL Mobile, which shall be documented by a sale and purchase agreement to be negotiated and executed by and among Tack Fiori, NQ Mobile and other shareholders of FL Mobile.

The MOU contemplates that, after the completion of the proposed transaction, NQ Mobile and/or its affiliates shall become the controlling shareholders of Tack Fiori.

For the third quarter, NQ Mobile reported net loss of $17 million or $0.19 per American depositary share, or ADS, compared with a loss of $2.4 million or $0.047 per ADS last year.

Excluding items, adjusted earnings for the quarter were $3.7 million or $0.04 per ADS.

Revenues for the quarter were $81 million compared with $54 million in the prior year.

Strong growth was seen across the company's advertising and enterprise mobility businesses, while mobile value added service revenues slid.

Results were mainly hurt by costs of reveneus that increased to $58.7 million from $22 million last year.

Operating expenses were $41 million compared with $35 million a year ago.

For the fourth quarter, the Company expects revenues of $82 million and $83 million.

For the full year, the company now expects revenues of $325 million to $326 million, up from prior guidance of $320 million to $325 million.

NQ closed Thursday at $5.03, up $0.17 or 3.50%, on the NYSE. In after hours, the stock gained $0.97 or 19.28% at $6.00.