Fang Holdings (SFUN) Q1 Earnings Miss, Revenues Fall Y/Y

Fang Holdings LimitedSFUN reported fiscal first-quarter 2018 loss per share of a penny compared with a loss of 3 cents in the year-ago quarter. Change in fair value of equity securities affected the company's earnings. The bottom line also missed the Zacks Consensus Estimate of earnings 4 cents.

Total revenues of $62.8 million were down 42.8% year over year. The massive downfall can be attributed to loss in e-commerce services business.

So far this year, shares of Fang Holdings have declined 42.8% against the industry 's 2.3% rally.

Let's check out the numbers in detail.

Revenues by Segment

Listing services segment revenues declined 21.5% year over year to $26.7 million. Decreasing number of paying members led to the downfall. The segment accounted for 42.6% of total revenues.

Marketing services segment revenues decreased 36.6% year over year to $17.3 million. Slowdown in the real estate market and continuous impact of tightening government policies weighed on segment revenues. The segment contributed 27.6% to total revenues.

E-commerce services segment revenues declined 82% year over year to $7.2 million. Segment revenues were hurt by the company's transition to a technology-driven open platform model. The segment accounted for 11.4% of total revenues.

Financial services segment revenues increased 124.9% year over year to $5.1 million. Rise in secured consumer loans drove segment revenues. The segment contributed 8% to total revenues.

Revenue from other value-added services increased 4.1% year over year to $6.5 million, owing to growing demand for the company's database and research services. The segment accounted for 10.4% of total revenues.

Fang Holdings Limited Revenue (TTM)

Fang Holdings Limited Revenue (TTM) | Fang Holdings Limited Quote

Operating Results

Gross profit decreased 13.3% from the year-ago quarter to $42.6 million. Adjusted EBITDA increased to $7.1 million from $1 million in the year-ago quarter.

Operating loss was $3.9 million compared with $6.1 million of operating loss in the prior-year quarter.

Operating expenses declined 15.8% year over year to $46.5 million. Selling expenses of $15.6 million were down 33.3% from the year-ago quarter, due to reduction in selling expenses associated with the company's e-commerce services and advertising and promotional expenses. General and administrative expenses were $30.7 million, down 2% on a year-over- year basis.

Balance Sheet and Cash Flow

Fang Holdings had cash and cash equivalents, restricted cash (current and non-current) and short-term investments of $492.4 million compared with $547.1 million at the end of the prior quarter. Net cash used in operating activities was $7.0 million in the reported quarter.

Fiscal 2018 Outlook

For fiscal year 2018, Fang Holdings expects non-GAAP net income to be profitable.

Zacks Rank & Upcoming Releases

Fang Holdings currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Investors interested in the broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Avis Budget CAR , Genpact G and Delphi Technologies DLPH . While Avis Budget and Genpact will report their quarterly numbers on Aug 7, Delphi Technologies will release results on Aug 8.

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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 Nasdaq, Inc.

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

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