BEIJING: Chinese Internet company Sina Corp. reported higher revenue and improved profit margins in the third quarter, driven by its microblog portal Weibo Corp.
Still, Sina’s overall profit dropped sharply as the year-ago period had been bolstered by investment gains.
The results follow those of Chinese e-commerce giant Alibaba Group Holding Ltd., which reported a sharp jump in profit in the comparable period, bolstered by a $2.93 billion one-time investment gain and higher-than-projected sales. Though they are rivals, Sina holds a stake in Alibaba, and Alibaba holds a stake in Sina’s Weibo.
Sina is also part of a consortium to take private online real-estate company E-House (China) Holdings Ltd.
An early pioneer of the Chinese Internet, Sina was founded in 1999 from the merger of Stone Rich Sight Information Technology Co., a Beijing software company, and Sinanet.com, a California-based company that ran Internet sites targeted at Chinese abroad. Weibo went public in the U.S. last year, and Sina retained a controlling stake.
Overall, Sina reported a profit of $14.9 million, or 16 cents a share, compared with $130.8 million, or $1.91 a share, a year earlier. Excluding stock-based compensation and other items, profit was 39 cents a share, compared with 19 cents a year earlier. Revenue rose 14% to $226.3 million, driven by a 48% increase at Weibo.
Analysts surveyed by Thomson Reuters had projected a profit of 20 cents a share on $222.6 million in revenue.
Gross margin improved to 63.3% from 62.9% a year earlier.
Advertising revenue rose 16% to $193.5 million, with revenue from Weibo offsetting a 14% decline in portal revenue. Sina ended the quarter with about $1.9 billion in cash.
Weibo, which reported results separately, swung to a third-quarter profit of $14.5 million, or 7 cents a share, compared with a loss of $6.7 million, or 3 cents a share a year earlier. Adjusted profit was 10 cents a share, compared with a year-earlier loss of a penny a share.
Weibo’s revenue surged to $124.7 million, from $84.1 million a year earlier, above the company’s projection of $120 million to $123 million and driven by a 62% increase in advertising and marketing revenue.
For the current quarter, Weibo projects revenue of $146 million to $149 million, compared with analysts’ projection of $147.5 million.
Weibo’s monthly active users totaled 222 million in September, up 5% from June and 33% from the year earlier. Daily active users averaged 100 million in September, up 30% from the year earlier.
