Chinese wireless value-added services company Hurray (HRAY) posted its unaudited financial results third quarter ended September 30, 2006 and saw a general quarter-on-quarter decline.
QD Wang, Chairman and CEO of Hurray, put a cheerful spin on the report and said, "We are pleased to report a very solid quarter which exceeded our previous estimate with only 1.1% sequential decline in wireless revenues despite significant regulatory change and challenging operating environment. Our core business has demonstrated remarkable resilience as a result of our successful execution of multi-platform, multi-channel and multi-operator strategies. Our effort throughout past year in solidifying business foundations and building a strong new management team began to pay off."
Total revenues for the third quarter ended September 30, 2006 were US$18.0 million, representing a 1.7% decrease over US$18.3 million for the preceding quarter, and a 9.2% increase from US$16.5 million for the third quarter in 2005.
Total wireless value-added services revenues were US$16.4 million for the third quarter of 2006, a decline of 1.1% as compared with US$16.6 million in the previous quarter and growth of 8.0% as compared with US$15.2 million in the third quarter of 2005.
2.5G services revenues were US$7.4 million for the third quarter of 2006, representing a decline of 9.6% as compared with US$8.1 million for the previous quarter and a decline of 20.3% as compared with US$9.2 million for the third quarter of 2005.
Of 2.5G services, WAP revenues were US$5.2 million, a decline of 6.2% as compared with US$5.5 million in the previous quarter and a decline of 41.1% as compared with US$8.8 million in the third quarter 2005. The decline of WAP revenues in the quarter was a result of new regulations implemented in the quarter mandating free trial periods and double reminders for subscription based services
Recorded music revenues, which represent revenues of the company's controlled music companies Hurray Freeland Music and Huayi Brothers Music, were US$1.5 million, an increase of 10.9% as compared with US$1.4 million in previous quarter. The growth of recorded music revenues in the third quarter is due to increased new releases by the firm's two music label companies in the quarter.
Total gross margin was 37.5% for the third quarter of 2006 as compared with 37.0% for the previous quarter and 51.1% for the third quarter of 2005.
Total operating expenses were US$5.6 million for the third quarter of 2006, representing an increase of 1.9% as compared to US$5.5 million for the previous quarter and an increase of 38.1% as compared to US$4.1 million for the third quarter of 2005.
As of September 30, 2006, the company had US$73.4 million in cash and cash equivalents.
