Youku Tudou Q3 Loss Narrows, But Misses Street; Shares Down 7%

(RTTNews) - Youku Tudou Inc. (YOKU), the biggest online video company in China, Thursday reported a third-quarter loss that narrowed from a year ago, driven largely by a jump in revenues, but still falling short of Wall Street estimates. However, revenues trumped expectations.

Following the news, shares of Youku slipped about 7 percent in the after-hours trading on the New York Stock Exchange.

Beijing, China-based Youku Tudou's third-quarter loss narrowed to 181.4 million yuan or 0.88 yuan per share from last year's loss of 218.6 million yuan or 1.31 yuan per share. On a US dollar basis, loss for the quarter was $29.6 million or $0.14 per ADS.

On average, eight analysts polled by Thomson Reuters estimated a loss of 0.82 yuan per share for the quarter. Analysts estimates typically exclude one-time items.

Adjusted loss for the quarter was 102.7 million yuan or 0.50 yuan per ADS.

Youku Tudou, formed from merger of Youku and Tudou-- China's two largest online video websites, said revenues for the quarter jumped 29 percent to 1.11 billion yuan from 857.74 million yuan last year. Analysts had a consensus revenue estimate of 1.10 billion yuan for the quarter.

Operating costs for the quarter rose to 452.5 million yuan from 312.8 million yuan last year.

Looking forward to the fourth quarter, the company expects revenue of 1.15 billion to 1.22 billion yuan. Analysts currently estimate revenues of 1.21 billion yuan for the quarter.

Yesterday, Youku announced that Chinese smartphone maker Xiaomi Inc. had agreed to acquire a stake in the video streaming company. Xiaomi, which has now become the third largest smartphone maker, plans to make its own media content.

Youku Tudou and Beijing-based company Xiaomi plans to jointly develop content and technology. Xiaomi will also license content from Youku Tudou, and the two companies will jointly invest in the production and distribution of online video content and movies.

However, both the companies did not reveal the investment details. Alibaba Group Holding Ltd., had acquired about about 17 percent of Youku Tudou earlier this year.

YOKU shares closed Thursday's regular trading at $21.25, down $0.58 or 2.66%, on the NYSE. The stock further dropped $1.37 or 6.45% in the after-hours trade.