Internet

Sina's Results Meet Expectations

Sina.com (SINA) met its expectations for the fourth quarter of 2004 and saw net revenues grow to a record US$200 million for the year ended December 31, 2004.

"We are proud of our achievement in 2004 and look forward to the challenge we are facing in 2005 as the operating environment for mobile value-added service becomes more difficult," said Wang Yan, CEO of Sina.

Advertising revenues for 2004 grew by 59% from 2003 to $65.4 million. Non-advertising revenues for 2004 grew by 84% from 2003 to $134.6 million. GAAP net income for 2004 was $66.0 million, or $1.15 diluted net income per share, compared to a net income of $31.4 million, or $0.58 diluted net income per share for 2003. Non-GAAP net income (previously referred to as "pro forma net income") for 2004 was $71.6 million, or $1.23 non-GAAP diluted net income per share, compared to a non-GAAP net income of $41.0 million, or $0.75 non-GAAP diluted net income per share for 2003.

For the fourth quarter, Sina continued to benefit from its diversified product offerings in mobile value-added service. Revenues from 2.5G (MMS and WAP) products and other new services grew approximately 28% from $5.2 million

for the third quarter to $6.7 million for the fourth quarter. Revenues from MMS products grew by 55% from $2.9 million in the third quarter to $4.5 million in the fourth quarter.

During the third quarter, the Company's IVR service was temporarily suspended by China Mobile due to the violation of certain operating procedures. The Company's IVR service was resumed on October 15th. As a result, the Company recorded only $0.2 million in revenues from IVR service for the fourth quarter, compared to $1.7 million recorded for the third quarter. Revenues from SMS products grew by 19% from $24.3M in the third quarter to $28.8M in the fourth quarter. The sequential revenue growth for SMS products was driven by the increase in revenues from usage-based SMS products promoted via direct advertisement on radio and television.

For the year 2004, non-advertising revenues amounted to $134.6 million, representing an increase of 84% from $73.1 million for the year 2003. Revenues from mobile value-added service totaled $124.0 million for the year 2004, representing an increase of 93% from $64.4 million for the year 2003. The year-over-year increase in revenues from mobile value-added service was primarily due to the growth in revenues from 2.5G service, IVR service and other new services, as well as from the acquisition of Crillion Corporation in March 2004. Total revenues generated from the Crillion acquisition amounted to $30.2 million for the year 2004.

Operating expenses for the fourth quarter totaled $21.4 million, an increase of 75% from $12.2 million reported in same period of 2003 and an increase of 14% over $18.8 million reported in the previous quarter. The sequential increase in operating expenses was mainly due to an increase in marketing expenses relating to mobile value-added services, an increase in product development costs relating to instant messaging and search engine development and an increase in general and administrative expenses relating to professional service fees. During the fourth quarter, the Company incurred higher than expected costs associated with the compliance of the Sarbanes-Oxley laws. Expenses for professional service fees relating to the compliance project amounted to $0.6 million in the fourth quarter, compared to $0.2 million for the third quarter.

Leave a Reply

Your email address will not be published. Required fields are marked *

Send this to a friend