SouFun Keeps Earnings Streak Alive, Shares Up - Analyst Blog

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With its fourth-quarter 2013 operating earnings of $1.41 per share exceeding the Zacks Consensus Estimate by 34.5%, SouFun Holdings Ltd. ( SFUN ) has now delivered three consecutive quarters of positive surprises. Results also surged 86% year over year.

The improvement was primarily driven by solid performance across all of SouFun's business divisions.

SouFun delivered earnings per share of $3.58 per share for full year 2013 on revenues of $637.4 million. While the top line improved 48% year over year, the bottom line exhibited an increase of 73%. The bottom-line results outpaced the Zacks Consensus Estimate by 7.8%.

The results marked the 4th consecutive year of delivering numbers that exceeded the company's guidance since it went public. Such impressive performance at the company thus prompted a 0.43% increase in the share price to close at $78.83 yesterday.

Behind the Headlines

Total revenue of SouFun grossed $217.2 million in the quarter, improving 47.2% year over year riding on growth in listing services, SouFun membership services and marketing services.

Going by segments, Marketing services revenues increased 21.0% driven by higher advertising spending. Revenues from e-commerce services soared 67.2% attributable to expansion of SouFun membership services in existing and new cities. Listing services revenues surged 91.5% fuelled by increased paying agent subscribers. Other value-added services revenue jumped 174.5% year over year.

While operating expenses moved up 20.6%, selling expenses rose 25.2% due to increased staff cost. General and administrative expenses also increased 15.4%.

Though expenses climbed up, a higher magnitude of revenue increase drove a substantial operating income improvement by 81%.

Adjusted earnings before income tax, interest expenses, interest income, depreciation and amortization (EBITDA) improved 76.1% year over year to $132 million.

Financial Update

SouFun exited 2013 with cash, cash equivalents, and short-term investments of $591.1 million, which grew substantially from $143.6 million as of Dec 31, 2012.

Cash flow from operating activities was $408.0 million in 2013, increasing 86.0% over 2012.

Long-term loans of the company stood at $181 million at the end of 2013, much higher than $81 million reported at the end of 2012.

Guidance

SouFun expects to generate $780.0 million to $796.0 million in revenues in 2014. The estimates translate into a year-over-year increase of 22.5% to 25%.

Zacks Rank

SouFun presently sports a Zacks Rank #1 (Strong Buy).

Performance of Other Business Service Providers

Rentrak Corporation ( RENT ) delivered fourth-quarter 2013 operating loss of 3 cents per share better than the Zacks Consensus Estimate loss of 13 cents and year ago loss of 15 cents.

Cardtronics Inc . ( CATM ) reported fourth-quarter operating net earnings of 44 cents a share that beat the Zacks Consensus Estimate by a penny. However, the result increased from the prior-year quarter figure by 19%.

Viad Corp.  ( VVI ) posted fourth-quarter loss per share of 20 cents, wider than the Zacks Consensus Estimate loss of 17 cents but narrower than the loss of 34 cents incurred in year-ago quarter.



CARDTRONICS INC (CATM): Free Stock Analysis Report

RENTRAK CORP (RENT): Free Stock Analysis Report

SOUFUN HLDG-ADR (SFUN): Free Stock Analysis Report

VIAD CORP (VVI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CATM , RENT , SFUN , VVI

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