NQ Mobile Inc.
) dropped 8.69% in after-hours trade on Thursday after the
company's break-even results which lagged the Zacks Consensus
Estimate of 11 cents as well as earnings of 9 cents per share
reported in the year-ago quarter.
Revenues for the quarter surged 126% on a year-over-year basis
to $67.9 million and surpassed the Zacks Consensus Estimate of
$63.0 million. Higher services revenues (up 95.6% year over year)
and growth in product revenues from Enterprise mobility (up 287%
year over year) primarily aided total revenue.
Among service segment, revenues from Mobile Value Added
Service increased 35.4% year over year buoyed by higher Mobile
Game revenues. New game launches and growth user base of FL
Mobile's game platform primarily boosted segment results.
Advertising revenues soared 532.4% year over year as the
company successfully monetization efforts of its advertising
platforms. Products and services related to the Enterprise
mobility segment increased on a year-over-year basis primarily
due to expansion in its enterprise business and client wins.
Although the company's gross profit increased 62.8% from the
year-ago quarter to $33.1 million, margins came in at 48.8%
compared to 67.8% in the year-ago quarter. Higher contribution
from low-margin mobile games and advertising revenues impacted
NQ Mobile reported operating loss (including share-based
compensation but excluding other one-time items) of $2.3 million
compared with $0.4 million operating income reported in the
year-ago quarter. Higher-than-expected operating expenses (up
77.4% year over year) impacted operating results. The company
reported marginal loss of $0.03 million compared to a net income
of $4.9 million in the year-ago quarter.
NQ Mobile exited the quarter with cash and cash equivalents of
$179.7 million compared to $34.3 million in the previous quarter.
The company had $175.4 million of convertible debt in its balance
sheet. The company used $13.4 million of cash in operations
compared to cash generated by operating activities of $22.2
million in the previous quarter. During the fourth quarter, NQ
Mobile repurchased shares worth $4.7 million.
For the first quarter of 2014, NQ Mobile expects its revenues
to between $75 million and $76 million, higher than the Zacks
Consensus Estimate of $72 million. Moreover, the company expects
fiscal 2014 revenues in the range of $320-$325 million, higher
than the Zacks Consensus Estimate of $279.0 million.
NQ Mobile reported mixed fourth-quarter results wherein the
top line beat the Zacks Consensus Estimate but the bottom line
missed the same. The company's better-than-expected user growth
in FL Mobile's gaming platform and new game launches remain the
growth catalysts. The company's association with Sprint and
Samsung is another positive for the company.
However, the company's margins are impacted due to higher
expenses and higher contribution of low-margin businesses which
is affecting the overall results.
Currently, NQ Mobile has a Zacks Rank #3 (Hold). Investors can
look at stocks such as
) which sport a Zacks Rank #2 (Buy).
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