Total revenues for Tom Online (TOMO) during for the first quarter ended March 31, 2006 were US$48.58 million, an increase of 37.7% from the same period last year and up 1.0% from last quarter.

Wang Lei Lei, Tom Online Chief Executive Officer and an Executive Director, said, "While competition in the online and wireless Internet space is becoming more intense, the overall operating environment has stabilised at the same time."

Gross profit was US$19.96 million, representing an increase of 43.7% over the same period last year but a 6.6% decline from last quarter as gross margins declined in the first quarter to 41.1% from 44.4% in the fourth quarter of 2005. However, gross margins increased from the first quarter of 2005, which were 39.4%.

Total operating expenses were US$9.32 million in the quarter, roughly flat from the fourth quarter of 2005, but an increase of 59.7% over the same period last year.

Operating income was US$10.65 million up 32.1% from the same period last year but down 12.3% from the previous quarter, due to the first time expensing of SBC. Excluding SBC expenses, operating income would have been US$11.43 mn. Operating margins were 21.9% in the first quarter of 2006, compared to 25.2% in the previous quarter.

Net interest income was US$0.49 million. In addition, as Tom Online's functional currency is CNY, the company recorded a non-operating gain of US$0.92 mn due to the appreciation of the CNY relative to its net non-CNY monetary liabilities at the period end.

Net Income was US$12.14 million, an increase of 32.5% year-on-year but a decline of 4.6% from the previous quarter, due to lower gross margins and SBC expenses.

Jay Chang, Chief Financial Officer and an Executive Director of Tom Online, commented: "I'm pleased to say that as a result of our operational excellence and focus on building a broad network of distributional partnerships, Tom Online was not only able to produce another quarter of solid financial results but also further consolidate its leadership in the wireless Internet space."

Based on current information and expectations as of May 10, 2006, the company estimates total revenues for the second quarter of 2006 would be between US$50.0 million and US$51.5 million.


Please enter your comment!
Please enter your name here