SouFun Holdings Ltd
) reported operating net income of 16 cents per share in the second
quarter of 2014, a penny higher than the Zacks Consensus Estimate.
Earnings also improved 6.7% year over year.
The improvement was primarily driven by solid performance across
all of SouFun's business divisions.
The company reported net income of 15 cents, up 15.4% year over
SouFun's impressive performance prompted the share price to rise
11.8% and close at $11.56 yesterday.
Behind the Headlines
Total revenue of SouFun grossed $168.2 million in the quarter,
improving 16.7% year over year due to growth in marketing services.
However, revenues lagged the Zacks Consensus estimate of $177
Going by segments, Marketing services revenues increased 26.1% and
continues to witness strong demand from developer clients,
especially in lower tier cities. Revenues from e-Commerce services
rose 8%, driven by increased penetration in more cities, partly
offset by soft demand for new homes. Listing services revenues
improved 8.6%. Other value-added services revenues improved 100%
year over year, largely on the strength of increase in real estate
data related services.
While operating expenses moved up 35.9%, selling expenses rose
37.8% owing to increase in staff costs and advertising and
promotion expenses. General and administrative expenses also rose
Though expenses climbed up, a higher revenue increase drove a 7.8%
improvement in operating income .
Adjusted earnings before income tax, interest expenses, interest
income, depreciation and amortization (EBITDA) improved 8.7% year
over year to $87.7 million.
SouFun exited 2013 with cash and cash equivalents of 239.2 million,
down about 59% from 2013-end.
Long-term loans stood at $181 million, in line with 2013-end level.
Cash flow from operating activities was $40.1 million the quarter,
decreasing about 50% year over year. The decline stemmed from
entrusted loans provided to developers and home buyers under
financial services program and decrease in advance payments from
The board of directors of SouFun declared a cash dividend of $1.00
per share. The dividend will be paid on Aug 29 to shareholders of
record on Aug 18.
SouFun expects to generate $727-$739 million in revenues in 2014,
down from $780-$796 million. This translates into a year-over-year
growth of 14-16% (down from 22.5-25%). The downward revision
accounts for slowdown in the Chinese real estate market, reduction
in fees charged for listing services and longer time taken for new
businesses to contribute significantly to revenue growth.
SouFun presently sports a Zacks Rank #4 (Sell).
Performance of Other Business Service Providers
Avis Budget Group Inc. (
) reported second-quarter 2014 operating income of 68 cents per
share, beating the Zacks Consensus Estimate by 7.9%.
Cardtronics Inc.'s (
) second-quarter 2014 operating income of 55 cents per share beat
the Zacks Consensus Estimate by 5.8%.
Viad Corp. (
) posted second-quarter earnings per share of 44 cents, surpassing
the Zacks Consensus Estimate by 12.8%.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
AVIS BUDGET GRP (CAR): Free Stock Analysis
CARDTRONICS INC (CATM): Free Stock Analysis
VIAD CORP (VVI): Free Stock Analysis Report
SOUFUN HLDG-ADR (SFUN): Free Stock Analysis
To read this article on Zacks.com click here.