(SINA) is one of the largest online media portals in China,
providing users with a broad selection of information,
communications and entertainment choices, while providing
advertisers and content holders with a massive audience to target
with online advertising.
This week the company reported strong 3Q13 results above
expectations, and provided robust 4Q13 revenue guidance fueled by
Weibo, their hugely successful "microblogging" site that is often
compared to a hybrid of
SINA reported third quarter earnings of 35 cents per share that
were well ahead of the Zacks Consensus Estimate of 17 cents and the
year-ago figure of 8 cents. SINA's partnership with the Alibaba
group contributed significantly to the company's overall results.
Weibo Leads the Way
Weibo total revenue was $53.4 million in the quarter, 30% of SINA's
$179.9 million revenue and more than double Weibo revenue of $23.6
million in 3Q12. Weibo ad revenue was $43.7m, up 119% YoY and 46%
Weibo's daily active user (DAU) base increased 11.2% to 60.2
million from the month of June to September. This was much better
than 8.2% growth reported during the March-June period.
SINA expects revenues for the fourth quarter of 2013 to be in the
range of $190.0 million and $194.0 million. Advertising revenues
are expected in the range of $160.0 million-$162.0 million, while
non-advertising revenues are projected in the range of $30.0
The Zacks Consensus Estimate for fiscal 2013 increased 33.3% to 8
cents per share as most of the estimates were revised higher over
the last 60 days. For fiscal 2014, the Zacks Consensus Estimate
increased 19.3% to $1.42 per share.
Revenue and Margin Drivers
There was a time not too long ago when investors questioned the
worth of Weibo to the company's web strategy. Now, among the key
investment drivers is clearly accelerating year-over-year revenue
growth as Weibo's revenue momentum and weighting increases.
And as Weibo moves from adjusted EBITDA losses to profits, margin
expansion is clearly evident. SINA adjusted EBITDA of $36.3 million
reflects a 20.2% margin compared to 10.8% in 3Q12 and a recent
trough of 4.2% in 1Q13.
Finally, now that Twitter has just launched its own successful IPO,
the value proposition for the Weibo franchise has been elevated.
And since the Chinese are focused on having their own Internet
players win instead of Google, Facebook, or Twitter, focusing on
the current winners like
(QIHU), and SINA is the way to go.
Kevin Cook is a Senior Stock Strategist for Zacks where he runs
Follow The Money
BAIDU INC (BIDU): Free Stock Analysis Report
FACEBOOK INC-A (FB): Free Stock Analysis Report
QIHOO 360 TECH (QIHU): Free Stock Analysis
SINA CORP (SINA): Free Stock Analysis Report
TWITTER INC (TWTR): Free Stock Analysis Report
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