Fang Holdings (SFUN) Q2 Earnings Up Y/Y, Revenues Decline

Fang Holdings LimitedSFUN reported second-quarter 2018 earnings per share of 13 cents against a loss of a penny in the year-ago quarter. Change in fair value of equity securities of $80.3 million (in relation to the new accounting pronouncement) and income tax benefits of $38.3 million boosted the company's earnings.

Total revenues of $74.4 million declined 32.4% year over year due to decrease in e-commerce services revenues. So far this year, shares of Fang Holdings have declined 46% against the industry 's 11% rally.

On the call, management sounded optimistic about Fang Holdings' technology-driven open platform, which offers upgraded products and services to real estate companies, professionals, home buyers and sellers. The company is focused on serving its clients to recover its market share sustainably.

Concurrent with the earnings release, the company made announcements related to the change in its board members. Shaohua Zhang , founder and managing director of Beijing Beyondal Electric Co., Ltd., has been appointed as an independent director and member of the audit committee. Minqiang Bi recently resigned from the board due to some personal reasons.

Let's check out the numbers in detail.

Revenues by Segment

Listing services segment revenues declined 21.7% year over year to $33.2 million. Decreasing number of paying members resulted in the downfall. The segment accounted for 44.5% of total revenues.

Marketing services segment revenues decreased 28.3% year over year to $25.1 million. Slowdown in the real estate market and continuous impact of tightening government policies weighed on segment revenues. The segment contributed 33.7% to total revenues.

E-commerce services segment revenues declined 92.4% year over year to $1.7 million. Segment revenues were hurt by the company's transition to a technology-driven open platform model. The segment accounted for 2.3% of total revenues.

Financial services segment revenues increased 121.8% year over year to $6 million. Rising demand for the company's diversified loan platform products drove segment revenues. The segment contributed 8.1% to total revenues.

Revenues from other value-added services increased 17.9% year over year to $8.4 million, owing to growing demand for the company's database and research services. The segment accounted for 11.3% of total revenues.

Fang Holdings Limited Revenue (TTM)

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

Operating Results

Gross profit increased 8% from the year-ago quarter to $66.3 million. Adjusted EBITDA came in at $27.4 million compared with $1.3 million in the prior-year quarter.

Operating income was $16.7 million against operating loss of $6.1 million in the year-ago quarter due to downsized e-commerce services and effective cost control.

Operating expenses declined 26.4% year over year to $49.6 million. Selling expenses of $19 million were down 17.7% from the year-ago quarter due to reduction in expenses associated with the company's advertising and promotional activities. General and administrative expenses were $33.8 million, down 22.5% on a year over year basis due to effective cost control methods.

Balance Sheet and Cash Flow

Fang Holdings had cash and cash equivalents, restricted cash (current and non-current) and short-term investments of $481.8 million compared with $492.4 million at the end of the prior quarter. Net cash generated from operating activities was $41.3 million in the reported quarter.

2018 Outlook

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

Zacks Rank & Upcoming Releases

Fang Holdings currently carries a Zacks Rank #3 (Hold). 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 earnings reports from key players like ABM Industries ABM , FactSet FDS and Paychex PAYX . While ABM Industries and FactSet will report third-quarter fiscal 2018 on Sep 6 and fourth quarter fiscal 2018 results on Sep 25, respectively, Paychex is expected to release first-quarter fiscal 2019 on Oct 2.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

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

Fang Holdings Limited (SFUN): Free Stock Analysis Report

FactSet Research Systems Inc. (FDS): Free Stock Analysis Report

ABM Industries Incorporated (ABM): Free Stock Analysis Report

Paychex, Inc. (PAYX): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

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.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.