Linktone (LTON) has announced its financial results for the first quarter ended March 31, 2005.

The company posted net income of $3.2 million for the quarter, compared with $2.8 million for the first quarter of 2004 and with $3.3 million for the fourth quarter of 2004. Gross revenues totaled $15.1 million, up 61% from $9.4 million for the first quarter of 2004 and down from $15.5 million for the fourth quarter of 2004.

Specifically, Linktone's first-quarter sales of 2.5G and audio-related services were $5.3 million, or 35% of gross revenues, compared with $6.4 million, or 41%, for the fourth quarter of 2004.

The company's first-quarter sales of short messaging services (SMS) were $9.8 million, or 65% of gross revenues, up from $9.1 million, or 59%, for the prior quarter. The sequential growth resulted primarily from increased promotional activity, as well as the near-completion of China Mobile's implementation of its Mobile Information Service Center (MISC) platform, which had exerted downward pressure on Linktone's SMS sales during the second half of 2004.

Linktone estimates that it averaged approximately 7.3 million paying users per month for the first quarter of 2005, compared with estimates of approximately 7.1 million for the fourth quarter of 2004. The company estimates that average revenue per user (ARPU) was approximately $0.69 per month for the first quarter of 2005, compared with estimates of approximately $0.74 per month for the previous quarter. The sequential decrease reflected lower MMS and WAP sales.

Linktone's operating margin for the first quarter of 2005 was 21% of net revenues, compared with 22% for the fourth quarter of 2004. Net margin was 22% of net revenues, compared with 22% for the prior quarter.