Internet

Sina.com Announces Q3 Results, Expects Next Quarter To Dip In China

Chinese Internet company Sina.com (SINA) announced its unaudited financial results for the quarter ended September 30, 2008 and says net revenues increased 64% year over year to USD105.4 million, including Internet advertising revenues increasing 66% year over year to USD76.2 million.

Charles Chao, CEO of Sina.com, stated: "While the global economic environment in general has significantly deteriorated and the advertising market in post-Olympic China has become increasingly challenging and uncertain, we believe Sina.com is going to remain competitive in the market given continuing growth of Internet adoption and shift of advertising budget from offline to online."

Sina.com estimates its total revenues for the fourth quarter of 2008 will sink to between USD98.0 million and USD101.0 million, with advertising revenues to be between USD69.0 million and USD71.0 million and non-advertising revenues to be between USD29.0 million and USD30.0 million.

Non-advertising revenues for the third quarter of 2008 totaled USD29.2 million, representing a 58% increase from the same period in 2007 and an 11% increase from the previous quarter. For the third quarter of 2008, mobile value added service revenues grew 63% from the same period last year and 11% from last quarter to USD27.1 million. The growth of the company's mobile revenues mostly resulted from the stabilization of operator policies, government regulations and business environment.

Gross margin for the third quarter of 2008 was 57%, down from 62% for the same period last year and last quarter. Advertising gross margin for the third quarter of 2008 was 58%, compared to 64% for the same period last year and last quarter. MVAS gross margin for the third quarter of 2008 was 53%, compared to 56% for the same period last year and 55% last quarter. The decline in MVAS gross margin was primarily due to increased costs related to revenue sharing arrangements.

Operating expenses for the third quarter of 2008 amounted to USD40.1 million, an increase of 62% from the same period last year and an increase of 10% from last quarter. For the third quarter of 2008, non-GAAP operating expenses, which excludes stock-based compensation and amortization expense of intangible assets, were USD36.9 million, representing an increase of 60% from the same period last year and an increase 10% from the previous quarter. The increase in operating expenses was primarily due to higher marketing expenses associated with the Beijing Olympics and, to a lesser extent, higher sales and engineering related payroll and other personnel costs.

Net income for the third quarter of 2008 was USD22.0 million, an increase of 28% from the same period last year and a decrease of 13% from last quarter. Diluted net income per share for the third quarter of 2008 was USD0.36, compared to USD0.28 in the same period last year and USD0.42 last quarter. Non-GAAP net income for the third quarter of 2008 was USD26.8 million, an increase of 40% from the same period last year and an increase of 3% from the previous quarter. Non-GAAP diluted net income per share for the third quarter of 2008 was USD0.44, compared to USD0.32 in the same period last year and USD0.43 last quarter.

As of September 30, 2008, Sina.com's cash, cash equivalents and short-term investments amounted to USD562.5 million, representing an increase of USD123.1 million from a year ago.

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