Tuesday, VisionChina Media Inc. (VISN), an out-of-home digital television advertising network, reported a dip in second-quarter earnings from last year, notwithstanding a surge in revenues, reflecting higher expenses. Going forward, the company guided third quarter, while lowering both earnings and revenue estimates for the full year.
Net income attributable to VisionChina Media's shareholders in the second quarter slipped to US$7.1 million or US$0.10 per share from US$8.5 million or US$0.12 per share in the prior year period.
On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.10 per share. Analysts' estimates typically exclude special items.
Total revenues for the period surged 51.8% to US$30.8 million from US$20.3 million in the second quarter last year, coming in line with four Wall Street analysts forecast of $30.75 million. The company cited growing acceptance of its media platform by traditional TV and out-of-home advertisers in China.
Limin Li, VisionChina Media's chairman and chief executive officer, said, "Our management team successfully delivered strong results during the quarter and met our financial targets for the first half of the year despite a challenging advertising market."
Network capacity, which is measured by total broadcasting hours, reached 34,399 hours in the second quarter of 2009, compared to 29,523 hours in the second quarter of 2008 and 32,737 hours in the first quarter of 2009.
Total broadcasting hours reached 34,399 in the quarter, compared to 29,523 in the same period a year ago. Average advertising revenues per broadcasting hour were US$865 in the quarter, up from US$661 in the previous year.
Total operating expenses more than doubled to US$8.82 million from US$3.98 million a year ago.
For the third quarter, the company estimates non-GAAP net income between US$7.5 million and US$8.3 million on revenues in the range of US$30.7 million to US$32.1 million. Analysts are currently looking for earnings of $0.16 per share on revenues of $36.23 million.
For the full year 2009, the company cut its revenue and earnings outlook due to more challenging sales environment and intensified competition within the industry. The company now expects non-GAAP net income in the range of US$31.0 million to US$33.0 million on revenues in the range of US$121 million to US$124 million. Previously, the company projected non-GAAP net income in the range of US$49 million to US$61 million and revenues in the range of US$141 million to US$157 million.
Wall Street analysts anticipate earnings of $0.58 per share on revenues of $137.56 million.
VISN closed Tuesday's trading at $5.87, down $0.58 or 8.99%, on a volume of about 877 thousand shares. In the after hours, the stock further lost $0.67 or 9.71% and were trading at $5.30.
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