51job Stock Falls on Slim Profit Growth
Monday May 9, 2:13 pm ET
China's 51job Shares Plunge on Slight Rise in First-Quarter Earnings
NEW YORK (AP) -- China's 51job Inc., which publishes employment listings in newspapers and online, said Monday that its first-quarter profit grew just 4 percent as cost increases offset sharply higher revenue.
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The company's American depositary shares dropped $5.09, or 24.9 percent, to $15.35 in heavy afternoon trading on the Nasdaq. 51job went public in September at a price of $14 per ADS.
Shanghai-based 51job earned 9.2 million Chinese yuan in the quarter, up from 8.8 million a year earlier. The latest-quarter results equal $1.1 million, or 4 cents per ADS, based on exchange rates at the end of March. The profit results met the low end of the company's guidance while sales exceeded expectations, according to spokeswoman Linda Chien.
Revenue rose 30 percent to 142.7 million yuan, or $17.2 million. President and Chief Executive Rick Yan said in a statement that the sales results were driven by solid page volume growth for print ads and a greater number of first-time customers online.
The company said this sales jump was offset by cost increases and promotional spending around the Chinese New Year, its peak season. 51job said it also recorded higher expenses from increasing its sales force and paying additional professional services fees.
Profit also was hurt by promotional price discounts in some cities.
For the second-quarter, 51job anticipates earnings of 0.36 to 0.50 yuan per ADS, or 4 cents to 6 cents, and revenue of 135 million to 145 million yuan, or $16.3 million to $17.5 million. During the second quarter of 2004, 51job earned 16.4 million yuan on sales of 116.8 million yuan.
Chien said sales and marketing costs will be "more moderate" in the second quarter compared with the first, while general and administrative expenses will be similar.
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