Sina Profit Soars on Investment-Related Gains -- Update

By Tess Stynes 

Sina Corp. said fourth-quarter earnings soared on investment-related gains and higher revenue driven by advertising growth at the Chinese online media company's Weibo Corp. unit.

Sina, an early pioneer of the Chinese Internet, and Weibo are battling with much larger companies-including Alibaba, Internet conglomerate Tencent Holdings Ltd. and search provider Baidu Inc. to dominate the Chinese Internet sector.

Weibo, which went public in the U.S. in April but remains controlled by Sina, allows users to publish brief public messages to followers who can repost them, similar to Twitter.

Chief Executive Charles Chao said "As we enter into 2015, we are excited about the various opportunities unfolding ahead of us on both Weibo and portal sides. We are also confident that our initiatives in revamping our legacy business will start to take shape and form the foundation for longer term growth."

For the 2015, Sina projected revenue, excluding effects of deferred license revenue, between $800 million and $900 million. Analysts polled by Thomson Reuters expected $885 million.

Overall, Sina reported a profit of $59.8 million, or 90 cents a share, up from $44.5 million, or 59 cents a share, a year earlier. Excluding stock-based compensation, gains related to investments and other items, earnings fell to 24 cents from 47 cents. Analysts expected per-share profit of 18 cents.

Revenue increased 7.2% to $211.1 million. Adjusted to exclude deferred license revenue effects, revenue rose 8% to $208.5 million, above the midpoint of company expectations for $204 million to $210 million.

Advertising revenue improved 14% to $181.9 million as an increase in Weibo advertising revenue was offset by a decline in portal revenue.

Operating expenses surged to $132.9 million from $99.5 million a year earlier, reflecting higher personnel costs, marketing expenditures and bad debt expenses.

Overall, Weibo reported a profit of $4.6 million, or two cents a share, down from $21.6 million, or 11 cents a share, a year earlier. Excluding stock-based compensation and other items, earnings rose to four cents from two cents. Analysts expected per-share profit of four cents.

Revenue increased 47% to $105.2 million, slightly above company expectations for $102 million to $105 million. Advertising and marketing revenue improved 57% to $88 million.

As of Dec. 31, monthly active users reached 175.7 million, and increase of 36% from a year earlier.

Total costs and expenses grew 43% to $100.3 million.

For the first quarter, Weibo forecast net revenue of $93 million and $96 million, compared with analysts' estimates of $94 million.

Write to Tess Stynes at [e-mail]

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