Sina.com's (SINA) net income decreased 45% year-over-year to $10.0 million, or $0.17 diluted net income per share, for the second quarter ended June 30, 2005.
In addition, net revenues for the quarter declined 6% year-over-year to $46.1 million, meeting the company's guidance of between $44.0 million and $48.0 million.
Advertising revenues for the quarter grew 31% year-over-year to $20.4 million, accounting for 44% of total revenues. Non-advertising revenues for the quarter declined 24% year-over-year to $25.8 million, accounting for 56% of total revenues.
"Despite a tough regulatory environment for wireless, we achieved the Company's guidance on both net revenues and net income," said Wang Yan, CEO of Sina, in a prepared statement. "We made great strides in our advertising business, which increased 22% from the prior quarter, and put increasing distance between us and our competitors. On the wireless front, we believe that the second quarter was a turning point for us and we may see modest growth for this sector in the near future."
For the quarter ended June 30, 2005, Sina reported net revenues of $46.1 million, a decrease of 6% from $49.2 million reported in the same period of 2004 and an increase of 1% from $45.8 million reported in the previous quarter, within the range of the Company's guidance of between $44.0 million and $48.0 million.
Sina saw its second quarter short messaging service (SMS) revenues decline 23% sequentially to $15.6 million, primarily caused by the ban of certain usage-based SMS products from television and radio commercials starting in February 2005, which the company previously disclosed.
Multimedia messaging service (MMS) revenues decreased 11% sequentially to $2.0 million, primarily caused by the change in China Mobile's billing procedures, which began in the first quarter of 2005. The decline in SMS and MMS revenues was partially offset by the growth of other 2.5G products, interactive voice response system (IVR) and other new services, which grew 24% sequentially to $5.0 million in the second quarter of 2005.
Gross margin for the quarter was 69%, up from 67% reported in the previous quarter and down from 71% reported in the same period last year. Gross margin for advertising revenues was approximately 68% for this quarter, compared to 65% for the previous quarter. The sequential increase in advertising gross margin was largely due to the increase in advertising revenues. Gross margin for non-advertising revenues for the quarter was 70%, which is slightly higher than the 69% from the previous quarter.
Operating expenses for this quarter totaled $20.4 million, an increase of 27% from $16.1 million reported in same period of 2004 and a decrease of 3% from $20.9 million reported in the previous quarter.
As of June 30, 2005, Sina's cash, cash equivalents and investments in marketable securities totaled $284.1 million, an increase of $0.7 million from three months ago.
Cash flow from operating activities for this quarter was $8.1 million, compared to $22.7 million for the previous quarter and $14.0 million for the same period in 2004.