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Why Fang Holdings Limited Stock Lost 16.5% in July

SFUN Chart

What happened

Fang Holdings Limited (NYSE: SFUN) stock fell 16.5% in July, according to data provided S&P Global Market Intelligence . The share price trended lower in the lead-up to the company's first-quarter earnings release on July 25 and then saw a steep sell-off following the publication of the results.

SFUN data by YCharts .

Sales for the quarter fell roughly 43% year over year to land at $62.8 million, coming in well below the average analyst estimate's call for revenue of $87.8 million. The company's loss for the quarter narrowed to $0.01 per share compared to a loss of $0.04 in the prior-year period. The company broke even on an adjusted basis, but the average analyst estimate had targeted earnings of $0.04 per share.

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Image source: Getty Images.

So what

A decline in e-commerce services revenue was the most significant factor in the quarter's big year-over-year revenue drop. The category's sales came in at $7.2 million, down 82% year over year from the $39.9 million in revenue that the e-commerce business recorded in the first quarter of 2017 .

Revenue from listing services fell roughly 21.5% to $26.7 million, and revenue dipped about 17% to $36.3 million. However, internet financial services sales climbed nearly 125% year over year in the quarter to reach $5.1 million, and other-value-added services were up around 4% at $6.3 million. Operating expenses actually went down about 16% in the quarter, but the big revenue decline meant that the company wasn't able to post a profit for the period.

Now what

Here's CEO Vincent Mo's summary of the company's turnaround efforts and plans for the future:

The company is deepening its reform from business lines to full operations including financial management. We are fully committed to transforming and upgrading the company for future growth. The reform has been a bumpy process but I believe our endless efforts in increasing platform traffic, technology innovations and product upgrades will be rewarded in the near future.

Management expects that average revenue per user will expand in the second, third, and fourth quarters and that the business will be profitable on a non-GAAP basis in the current fiscal year. However, the company did not issue more detailed second-quarter or full-year earnings guidance.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

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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