Renren Swings To Profit On Gains - Update

(RTTNews) - Chinese online social networking site Renren Inc. (RENN), Wednesday reported a swing to profit in the first quarter, despite lower revenues as the bottom line reflected a hefty gain.

Beijing, China-based Renren reported a first-quarter profit of $32.3 million or $0.09 per ADS, compared to a loss of $3.1 million or $0.01 per ADS last year.

Net income for the quarter primarily reflect the $57.1 million gain on the disposal of equity method investment. On an adjusted basis, earnings for the quarter were $36.1 million, up from $0.5 million last year.

On average, three analysts polled by Thomson Reuters expected a loss of $0.06 per share for the quarter. Analysts' estimates typically exclude special items.

Renren's total revenues for first quarter quarter plunged 39.9 percent to $24.90 million from $41.45 million last year.

Analysts had a consensus revenue estimate of $25.74 million for the quarter.

"First quarter revenues, as expected, remained under pressure from the challenges in advertising and gaming that we have faced for some quarters. On the positive side, the portion of advertising from mobile is growing and the interest from brand advertisers for the young target demographic that Renren serves is notably increasing," said Joseph Chen, Chairman and Chief Executive Officer.

Game revenues plummeted 52.5 percent to $12.7 million, while other IVAS revenues dropped 13.6 percent to $4.4 million. Online advertising revenues decreased 19.2 percent to $7.8 million from last year.

The number of activated users on Renren.com increased to about 210 million from about 184 million last year. Monthly unique log-in users dropped to 51 million from around 57 million a year ago.

Operating expenses dropped 16.7 percent to $38.0 million, with selling and marketing expenses down 16 percent and research and development expenses down 30.5 percent.

Looking forward to the second quarter, the company expects revenues of $21 million to $23 million.

Analysts currently expect revenues of $30.03 million for the second-quarter.

RENN closed Wednesday's trading at $3.17, down $0.11 or 3.35%, on the Nasdaq.