Sina Corporation (SINA)

[eastunder]

SINA Reports Third Quarter 2013 Financial Results
By PR Newswire, November 12, 2013, 04:41:00 PM




SHANGHAI, Nov. 12, 2013 /PRNewswire-FirstCall/ -- SINA Corporation (the "Company" or "SINA") (NASDAQ GS:SINA), a leading Internet media company serving China and the global Chinese communities, today announced its unaudited financial results for the third quarter ended September 30, 2013.

Third Quarter 2013 Highlights

Net revenues increased 21% year over year to $184.6 million. Non-GAAP net revenues increased 22% year over year to $179.9 million, reaching the high end of the Company's guidance between $176.0 million and $180.0 million.
Advertising revenues grew 26% year over year to $151.6 million, within the Company's guidance between $151.0 million and $153.0 million.
Non-advertising revenues increased 4% year over year to $33.1 million. Non-GAAP non-advertising revenues increased 5% year over year to $28.4 million, exceeding the Company's guidance between $25.0 million and $27.0 million, mainly driven by the growth of Weibo value-added Services ("Weibo VAS") revenues.
Net income attributable to SINA grew 157% year over year to $25.4 million, or $0.37 diluted net income per share attributable to SINA. Non-GAAP net income attributable to SINA grew 144% year over year to $28.5 million, or $0.42 non-GAAP diluted net income per share attributable to SINA.
Highlights for the Nine Months Ended September 30, 2013

Net revenues increased 20% year over year to $468.1 million. Non-GAAP net revenues increased 21% year over year to $454.0 million.
Advertising revenues grew 21% year over year to $366.4 million.
Non-advertising revenues increased 16% year over year to $101.7 million. Non-GAAP non-advertising revenues increased 19% year over year to $87.6 million.
Net income attributable to SINA was $0.7 million, or less than $0.01 diluted net loss per share attributable to SINA. Non-GAAP net income attributable to SINA was $44.3 million, compared to $1.4 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA was $0.65, compared to $0.01 for the same period last year.
"We are pleased with our results for the third quarter with significant growth in profitability driven primarily by strong momentum in Weibo monetization," said Charles Chao, Chairman and CEO of SINA. "We are at the dawn of leveraging user behaviors to provide more interesting and relevant advertising and services. Our efforts to diversify Weibo's monetization while continuing to invest and innovate SINA's offerings are seeing not only revenue acceleration but also continuing profit margin expansion."

Financial Results

For the third quarter of 2013, SINA reported net revenues of $184.6 million, compared to $152.4 million for the same period last year. Non-GAAP net revenues for the third quarter of 2013 totaled $179.9 million, compared to $147.7 million for the same period last year.

Online advertising revenues for the third quarter of 2013 were $151.6 million, compared to$120.6 million for the same period last year. Weibo advertising revenues for the third quarter of 2013 grew 125% year over year to $43.7 million. Non-advertising revenues for the third quarter of 2013 totaled $33.1 million, compared to $31.8 million for the same period last year. Non-GAAP non-advertising revenues for the third quarter of 2013 totaled $28.4 million, compared to $27.1 million for the same period last year. Weibo VAS revenues, which include revenue share from web games and Weibo membership fees, grew 121% year over year to $9.7 million.

Net revenues for the nine months ended September 30, 2013 were $468.1 million, compared to $390.2 million for the same period last year. Non-GAAP net revenues for the nine months ended September 30, 2013 totaled $454.0 million, compared to $376.1 million for the same period last year. Advertising revenues for the nine months ended September 30, 2013 totaled $366.4 million, compared to $302.3 million for the same period last year. Non-GAAP non-advertising revenues for the nine months ended September 30, 2013 were $87.6 million, compared to $73.9 million for the same period last year, mainly due to the increase in Weibo VAS revenues, partially offset by the decrease in MVAS revenues.

Gross margin for the third quarter of 2013 was 64%, compared to 54% for the same period last year. Advertising gross margin was 64%, compared to 55% for the same period last year. Non-GAAP advertising gross margin increased to 64%, up from 56% for the same period last year, reflecting SINA's efforts to scale its core advertising business profitably. Non-advertising revenue gross margin for the third quarter of 2013 was 64%, compared to 51% for the same period last year. Non-GAAP non-advertising revenue gross margin for the third quarter of 2013 increased to 58%, up from 43% for the same period last year, primarily due to the shift in revenue mix from low margin MVAS to higher margin Weibo VAS.

Gross margin for the nine months ended September 30, 2013 was 57%, compared to 52% for the same period last year. Non-GAAP advertising gross margin was 58% for the nine months ended September 30, 2013, compared to 52% for the same period last year, reflecting the Company's efforts to scale its advertising business profitably. Non-GAAP non-advertising revenue gross margin for the nine months ended September 30, 2013was 52%, up from 44% for the same period last year, primarily due to the shift in revenue mix from low margin MVAS to higher margin Weibo VAS.

Operating expenses for the third quarter of 2013 totaled $94.9 million, compared to $79.2 million for the same period last year. Non-GAAP operating expenses for the third quarter of 2013 totaled $90.5 million, compared to $73.7 million for the same period last year. The increase in non-GAAP operating expenses was primarily due to higher personnel costs and increase in marketing expenditures.

Operating expenses for the nine months ended September 30, 2013 were $271.9 million, compared to $216.2 million for the same period last year. Non-GAAP operating expenses for the nine months ended September 30, 2013 were $235.7 million, compared to $204.6 million for the same period last year, mainly due to increase in personnel costs arising from additional headcount and general salary increases, as well as higher marketing expenditures.

Income from operations for the third quarter of 2013 was $23.2 million, compared to $3.8 million for the same period last year. Non-GAAP income from operations for the third quarter of 2013 was $23.4 million, compared to $5.4 million for the same period last year.

Loss from operations for the nine months ended September 30, 2013 was $4.9 million, compared to $14.1 million for the same period last year. Non-GAAP income from operations for the nine months ended September 30, 2013 was $23.0 million, compared to a non-GAAP loss from operations of $14.2 million.

Non-operating income for the third quarter of 2013 was $7.7 million, compared to $8.3 million for the same period last year. Non-operating income for the third quarter of 2013 included $3.2 million, or $5.7 million on a non-GAAP basis, in earnings from equity investments, which were accounted for under the equity-method accounting and reported on a one-quarter lagging basis.

Non-operating income for the nine months ended September 30, 2013 was $11.3 million, compared to $45.2 million for the same period last year. Non-operating income for the nine months ended September 30, 2013 included $6.0 million, or $14.7 million on a non-GAAP basis, in earnings from equity investments, which were accounted for under the equity-method accounting and reported on a one-quarter lagging basis.

Net income attributable to SINA for the third quarter of 2013 was $25.4 million, compared to $9.9 million for the same period last year. Diluted net income per share attributable to SINA for the third quarter of 2013 was $0.37, compared to $0.14 for the same period last year. Non-GAAP net income attributable to SINA for the third quarter of 2013 was $28.5 million, compared to $11.7 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA for the third quarter of 2013 was $0.42, compared to $0.17 for the same period last year.

Net income attributable to SINA for the nine months ended September 30, 2013 totaled $0.7 million, or less than $0.01 diluted net loss per share attributable to SINA, compared to $29.4 million, or $0.43 diluted net income per share attributable to SINA for the same period last year. Non-GAAP net income attributable to SINA for the nine months ended September 30, 2013, was $44.3 million, or $0.65 diluted net income per share, compared to $1.4 million, or $0.01 non-GAAP diluted net income per share, for the same period last year.

As of September 30 2013, SINA's cash, cash equivalents and short-term investments totaled $1,217.9 million, compared to $713.6 million as of December 31, 2012. The increase in cash, cash equivalents and short-term investments was mainly due to the net cash received from Alibaba for its investment in Weibo in the prior quarter. For the third quarter of 2013, cash provided by operating activities was $12.3 million, capital expenditures totaled $24.3 million and depreciation expenses amounted to $8.6 million.

Business Outlook

SINA estimates that its non-GAAP net revenues for the fourth quarter of 2013 will be between $190 million and $194 million, including advertising revenues to be between $160 million and $162 million and non-GAAP non-advertising revenues to be between $30 million and $32 million. Non-GAAP net revenues and non-GAAP non-advertising revenues exclude the recognition of $4.7 million in deferred license revenues related to SINA's equity investment in E-House/CRIC.



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