Sina Q3 Profit Jumps On Alibaba Stake Sale

(RTTNews) - Chinese online media company Sina Corp (SINA), Thursday reported a surge in profit for the third quarter, reflecting mainly a hefty gain from sale of investment in Alibaba at its IPO. The bottom line also reflects strong performance at Sina's microblogging site Weibo and higher revenues, despite increased operating costs. Earnings for the quarter trumped Wall Street estimates, but revenues fell shy of expectations.

Shanghai, China-based Sina's third-quarter profit jumped to $133.6 million or $1.91 per share from $25.4 million or $0.37 per share last year. Results for the quarter include, among other gains, a $109.2 million gain from the sale of a portion of Sina's investment in Alibaba at its initial public offering.

Adjusted net income for the quarter dropped to $13.1 million or $0.19 per share from $28.5 million or $0.42 per share last year. On average, 13 analysts polled by Thomson Reuters expected earnings of $0.17 per share for the quarter. Analysts' estimates typically exclude special items.

Sina's revenues for the quarter rose to $198.6 million from $184.6 million last year. Adjusted revenues rose to $196.0 million from $179.9 million a year ago. However, revenues fell short of analysts' consensus of $196.36 million for the quarter.

Advertising revenues for the quarter grew 10 percent year-over-year to $166.8 million, driven by increase in Weibo advertising revenues, while non-advertising revenue dropped to $31.8 million from $33.1 million last year.

Gross margins for the third quarter dropped to 63 percent from 64 percent last year. Operating costs rose to $135.7 million from $94.9 million, reflecting higher personnel costs, marketing expenditures and bad debt expenses.

Sina's CEO Charles Chao said, "In the third quarter of 2014, Weibo continued to show strong momentum in both revenue and user growth." Weibo's third-quarter revenues grew 58 percent as monthly active users in September grew 36 percent from a year ago to 167 million.

Early this year, Sina spun off Weibo, however, continues to hold a majority stake. Chinese eCommerce firm Alibaba Group also holds a significant stake in Weibo.

Weibo's third-quarter loss narrowed to $5.2 million or $0.03 per share from last year's loss of $5.3 million or $0.04 per share.

Excluding items, adjusted loss for the quarter was $0.01 per share, narrower than $0.03 per share a year ago. Analysts estimated a loss of $0.01 per share for the quarter.

Weibo's revenues for the quarter rose 58 percent to $84.1 million from $53.4 million last year. Analysts had a consensus revenue estimate of $81.5 million for the quarter.

Looking forward, Sina expects adjusted revenues for the fourth quarter between $204 million and $210 million. Analysts currently expect fourth-quarter revenues of $214.75 million.

Weibo expects fourth-quarter revenues of $102 million to $105 million. Analysts currently expect revenues of $105.6 million for the quarter.

WB closed Thursday's trading at $19.62, up $0.15 or 0.77%, on the Nasdaq. The stock further gained $0.68 or 3.47% in the after-hours trade.

SINA closed Thursday's trading at $41.85, up $0.01 or 0.02%, on the Nasdaq. The stock, however, dropped $1.33 or 3.18%, in the after-hours trade.