China-based internet portal company Sina Corp. (SINA), Tuesday reported a slip to loss in the first quarter, hurt mostly by lower margins. Nonetheless, loss per share was smaller than what analysts expected, while revenue fell shy of estimates.
Looking ahead, Sina detailed a weak revenue outlook for the second quarter 2012. Sina said it expects headwinds to continue into the second quarter, but hopes new product offering to lift its brand advertising business in the second half of the year. Shares of the company gained nearly 7 percent in after-hours trade on the Nasdaq.
Sina said its first-quarter results were impacted by gross margin that slid to 46 percent from 53 percent last year.
Operating expenses increased to $67 million from $41.8 million last year, on higher sales and product development costs.
Sina, which provides online media and mobile value-added services, said net revenue in the quarter grew 6 percent from last year, mainly on a 9 percent growth in advertising revenue. Non-advertising revenue meanwhile remained unchanged from the prior year.
Sina reported first-quarter net loss of $13.7 million or $0.21 per share, compared to net income of $15 million or $0.23 per share last year.
Excluding items, loss for the quarter was $14 million or $0.21 per share, compared to earnings of $17 million or $0.25 per share last year.
On average, 16 analysts polled by Thomson Reuters expected a loss of $0.23 per share for the quarter. Analysts' estimates typically exclude special items.
Net revenue for the quarter was $106 million, compared to $100 million last year.
Non-GAAP revenue totaled $101.5 million, compared to $95.5 million a year ago. Analysts expected revenue of $102.56 million.
Sina expects second quarter non-GAAP revenue of $126 million to $129 million. Analysts currently expect revenue of $130.44 million.
"Our brand advertising business got off to a relatively slow start in the first quarter due to the softening of macroeconomic conditions in China," said CEO Charles Chao.
"Although we expect macroeconomic headwinds to continue into the second quarter, we have begun test trials of Weibo brand advertising, which is powered by a social interest graph recommendation engine, and expect this new product offering to have a meaningful impact on our brand advertising business in the second half of this year.
SINA closed Monday at $51.68, down $0.57 or 1.09%, on a volume of 3 million shares on the Nasdaq. In after hours, the stock gained $3.56 or 6.89%. In the past year, the stock has traded in a range $46.86 - $128.17.
For comments and feedback: editorial@rttnews.com