SHANGHAI, China, May 14 /Xinhua-PRNewswire/ -- SINA Corporation (Nasdaq:SINA), a leading online media company and mobile value-added service (MVAS)provider for China and for the global Chinese communities, today announced itsunaudited financial results for the quarter ended March 31, 2008.
First Quarter 2008 Highlights -- Net revenues increased 39% year over year to $71.3 million, exceeding the Company's guidance of between $66.0 million and $68.0 million. -- Advertising revenues increased 51% year over year to $47.8 million, exceeding the Company's guidance of between $45.0 million and $46.0 million. -- Non-advertising revenues increased 20% year over year to $23.5 million, exceeding the Company's guidance of between $21.0 million and $22.0 million. -- GAAP net income increased 87% year over year to $16.1 million or $0.27 diluted net income per share. -- Non-GAAP net income* increased 73% year over year to $19.6 million, or $0.33 diluted non-GAAP net income per share.
* Non-GAAP measures are described below and reconciled to the corresponding GAAP measures in the section below entitled 'Reconciliation of Non-GAAP to GAAP Results.'
'We had an excellent first quarter to start the year 2008,' said CharlesChao, CEO of SINA. 'The growth of our advertising revenues has beenaccelerating and our mobile business has continued its rebound. Ouroutstanding performance in the advertising business is a strong indicationthat SINA's position as the leading online media and branded advertisingplatform in China has been further enhanced. We are equally pleased with ourcontinued success in building our Web 2.0 product lines with the launch ofSINA Space and SINA TV.'
Financial Results
For the first quarter of 2008, SINA reported total revenues of $71.3million, compared to $51.3 million in the same period in 2007 and $70.7million for the fourth quarter of 2007.
Advertising revenues for the first quarter of 2008 totaled $47.8 million,representing a 51% increase from the same period last year and a 5% decreasefrom last quarter. Advertising revenues in China totaled $47.0 million forthe first quarter of 2008, representing an increase of 52% from same periodlast year and a decrease of 4% from last quarter. The quarter over quarterdecrease in advertising revenues was mainly due to seasonality, as the firstquarter has historically been the Company's weakest quarter for advertisingrevenues. Advertising revenues in the first quarter of 2008 represented 67%of total revenues, up from 62% in the same period last year.
For the first quarter of 2008, MVAS revenues, which accounted for 92% ofnon-advertising revenues during the quarter, reached $21.7 million,
representing an increase of 19% from the same period last year and 16% fromlast quarter.
Gross margin for the first quarter of 2008 was 59%, flat over the sameperiod last year and down from 62% last quarter. Advertising gross margin forthe first quarter of 2008 was 60%, compared to 58% in the same period lastyear and 64% in the previous quarter. Excluding stock-based compensation,non-GAAP advertising gross margin for the first quarter of 2008 was 62%,compared to 59% in the same period last year and 65% in the previous quarter.The year over year increase in advertising gross margin was mainly due toadvertising revenue growing faster than advertising cost of sales. On asequential basis, advertising gross margin declined due to lower advertisingrevenues while bandwidth and content costs increased.
MVAS gross margin for the first quarter of 2008 was 56%, compared to 60%in the same period last year and flat over last quarter. The year over yeardecrease in MVAS gross margin was mainly related to increased content andchannel costs.
Operating expenses for the first quarter of 2008 totaled $28.7 million, anincrease of 25% from the same period last year and an increase of 1% from lastquarter. Non-GAAP operating expenses for the first quarter of 2008, whichexclude stock-based compensation and amortization expense of intangible assets,was $25.8 million, representing a 24% increase from the same period last yearand flat over last quarter. The year over year increase in operating expensesprimarily relates to higher marketing spending and higher engineering-relatedpayroll and other personnel costs.
Interest and other income for the first quarter of 2008 was $6.2 million,an increase of 134% from the same period last year and an increase of 66% fromlast quarter. Other income includes net foreign exchange gains of $2.7million in the first quarter of 2008, compared to $0.1 million from the sameperiod last year and $0.6 million from last quarter.
Provision for income taxes for the first quarter of 2008 was $3.6 million,an increase of 159% from the same period last year and an increase of 87% fromlast quarter. The Company made a provision for income taxes for the firstquarter of 2008 assuming an effective tax rate of 18%. On January 1, 2008, anew Enterprise Income Tax ('EIT') Law came into effect in China. As of March31, 2008, the criteria for which the Company must meet to renew its new orhigh technology status under the new EIT Law were undefined. Consequently,the Company made an income tax provision for the first quarter of 2008,without considering the tax benefits as a qualified new or high technologyenterprise in China. Should the Company receive the new or high technologystatus under the new EIT Law, its effective income tax rate may decrease towithin the range of 13-14 %, retroactive to January 1, 2008, and any excessaccrual made to date would be reversed.
Net income for the first quarter of 2008 was $16.1 million, or $0.27diluted net income per share, compared to $8.6 million, or $0.15 diluted netincome per share, for the same period last year. Non-GAAP net income for thefirst quarter of 2008 was $19.6 million, or $0.33 diluted non-GAAP net incomeper share, compared to $11.4 million, or $0.19 diluted non-GAAP net income pershare, for the same period last year.
As of March 31, 2008, SINA's cash, cash equivalents and short-terminvestments totaled $511.6 million, compared to $382.7 million and $478.0million as of March 31, 2007 and December 31, 2007, respectively. Cash flowfrom operating activities for the first quarter of 2008 was $23.3 million,compared to $16.6 million for the same period last year and $31.9 million lastquarter.
Announcements
The Company announced that Herman Yu, Chief Financial Officer, isscheduled to present at the Oppenheimer Dragon Call Conference in New YorkCity on Tuesday, May 20, 2008.
Date: Tuesday, May 20, 2008 Time: 9:55 am Local Time Place: Oppenheimer & Co. Executive Conference Center, 300 Madison Avenue, NYC
The Company also announced that Charles Chao, Chief Executive Officer, isscheduled to present at the Goldman Sachs 9th Annual Internet Conference inLas Vegas on Wednesday, May 21, 2008.
Date: Wednesday, May 21, 2008 Time: 2:35 pm Local Time Place: The Bellagio, Las Vegas
In addition, the Company announced that its Board of Directors hasapproved the promotion of Yan Wang from Vice Chairman and Acting Chairman toChairman of the Board as of May 13, 2008.
Business Outlook
The Company estimates its total revenues for the second quarter of 2008 tobe between $88.0 million and $90.0 million, with advertising revenues to bebetween $64.0 million and $65.0 million and non-advertising revenues to bebetween $24.0 million and $25.0 million. Stock-based compensation for thesecond quarter of 2008 is expected to be approximately $4.0 million, whichexcludes any new shares that may be granted.
Non-GAAP Measures
This release contains non-GAAP financial measures.
