SHANGHAI, China, Aug. 6 /Xinhua-PRNewswire/ -- SINA Corporation (Nasdaq GS: SINA), a leading online media company and mobile value-added service (MVAS) provider for China and for the global Chinese communities, today announced its unaudited financial results for the quarter ended June 30, 2008.

    Second Quarter 2008 Highlights
    -- Net revenues increased 53% year over year to $91.3 million, exceeding
       the Company's guidance of between $88.0 million and $90.0 million.
    -- Advertising revenues increased 58% year over year to $64.9 million,
       reaching the high end of the Company's guidance of between $64.0
       million and $65.0 million.
    -- Non-advertising revenues increased 42% year over year to $26.4 million,
       exceeding the Company's guidance of between $24.0 million and $25.0
       million.
    -- GAAP net income grew 74% year over year to $25.2 million or $0.42
       diluted net income per share.
    -- Non-GAAP* net income grew 62% year over year to $26.2 million or $0.43
       diluted non-GAAP net income per share.
       *Non-GAAP measures are described below and reconciled to the
        corresponding GAAP measures in the section below titled
        ''Reconciliation of Non-GAAP to GAAP Results.'

''We are very proud of our record revenues and earnings in the second quarter. Our online advertising business in China, in particular, continues to be robust, growing 59% year over year, and was a major driving force in allowing us to achieve a net income growth of 74% year over year. SINA's ability to improve profitability, in light of aggressive marketing and content acquisition by our online advertising competitors, further demonstrates SINA's unmatched leadership in brand equity, content and product offerings as well as media influence in the Chinese marketplace,'' said Charles Chao, CEO of SINA. ''We expect SINA's advertising momentum to further accelerate in the third quarter, as we are prepared to provide an unprecedented online media coverage of the Beijing Olympic Games.''

Financial Results

For the second quarter of 2008, SINA reported total revenues of $91.3 million, representing a 53% increase from the same period last year and a 28% increase from last quarter.

Advertising revenues for the second quarter of 2008 totaled $64.9 million, growing 58% from the same period last year and 36% from last quarter. Advertising revenues in China grew 59% year over year, or 37% quarter over quarter, to $64.3 million for the second quarter of 2008. Advertising revenues in the second quarter of 2008 represented 71% of total revenues, up from 69% in the same period last year and 67% in the previous quarter.

Non-advertising revenues for the second quarter of 2008 totaled $26.4 million, representing a 42% increase from the same period in 2007 and a 12% increase from the previous quarter. For the second quarter of 2008, MVAS revenues, which accounted for 93% of non-advertising revenues, grew 44% from the same period last year and 13% from last quarter to $24.5 million.

Gross margin for the second quarter of 2008 was 62%, compared to 62% in the same period last year and 59% in the last quarter. Advertising gross margin for the second quarter of 2008 was 64%, compared to 62% in the same period last year and 60% in the previous quarter. Excluding stock-based compensation and amortization expense of intangible assets, advertising gross margin in the second quarter of 2008 was 65%, compared to 63% in the same period last year and 62% in the previous quarter. The increase in advertising gross margin was due to revenues growing faster than cost of sales. MVAS gross margin for the second quarter of 2008 was 55%, compared to 61% in the same period last year and 56% last quarter. The decrease in MVAS gross margin was mainly due to increased costs related to revenue sharing arrangements.

Operating expenses for the second quarter of 2008 totaled $36.6 million, an increase of 49% from the same period last year and an increase of 28% from last quarter. Excluding stock-based compensation and amortization expense of intangible assets, operating expenses for the second quarter of 2008 was $33.4 million, representing an increase of 47% from the same period last year and an increase of 29% from last quarter. The increase in operating expenses mainly relates higher marketing spending and, to a lesser extent, higher engineering and sales related payroll and other personnel costs.

Interest and other income for the second quarter of 2008 was $6.7 million, compared to $2.6 million from the same period last year and $6.2 million from last quarter. Other income for the second quarter of 2008 was $3.2 million, which mainly comprised of foreign exchange gains resulted from intercompany dividends. During the second quarter of 2008, the Company recorded a gain of $3.1 million, as a result of selling minority equity interest in one of its subsidiaries to E-House (China) Holdings Ltd.

Provision for income taxes for the second quarter of 2008 was $4.2 million, compared to $1.5 million from the same period last year and $3.6 million from last quarter. The Company made a provision for PRC income taxes for the second quarter of 2008 assuming an effective tax rate of 16%.

Net income for the second quarter of 2008 was $25.2 million, compared to $14.5 million in the same period last year and $16.1 million last quarter. Diluted net income per share for the second quarter of 2008 was $0.42, compared to $0.25 in the same period last year and $0.27 last quarter. Non-GAAP net income for the second quarter of 2008 totaled $26.2 million, compared to $16.1 million in the same period last year and $19.6 million in the previous quarter. Non-GAAP diluted net income per share for the second quarter of 2008 was $0.43, compared to $0.27 in the same period last year and $0.33 last quarter.

As of June 30, 2008, SINA's cash, cash equivalents and short-term investments totaled $540.9 million, compared to $478.0 million as of December 31, 2007. Cash flow from operating activities for the second quarter of 2008 was $25.3 million, compared to $20.9 million for the same period last year and $23.3 million last quarter.

Business Outlook

The Company estimates its total revenues for the third quarter of 2008 to be between $100 million and $104 million, with advertising revenues to be between $75 million and $77 million and non-advertising revenues to be between $25 million and $27 million. Stock-based compensation for the third quarter of 2008 is expected to be between $3.5 million to $4.0 million, which excludes any new shares that may be granted.

Investor Conference

The Company announced that Herman Yu, Chief Financial Officer, is scheduled to attend the 2008 Citi Investment Research Technology Conference in New York City on Tuesday, September 2, 2008, which will be held at the Hilton New York Hotel.

Non-GAAP Measures

This release contains non-GAAP financial measures. These non-GAAP financial measures, which are used as measures of the Company's performance, should be considered in addition to, not as a substitute for, measures of the Company's financial performance prepared in accordance with United States Generally Accepted Accounting Principles (''GAAP''). The Company's non-GAAP financial measures may be defined differently than similar terms used by other companies. Accordingly, care should be exercised in understanding how the Company defines its non-GAAP financial measures.

Reconciliations of the Company's non-GAAP measures to the nearest GAAP measures are set forth in the section below titled ''Reconciliation of Non-GAAP to GAAP Results.' These non-GAAP measures include non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP net income, non-GAAP diluted net income per share and non-GAAP advertising gross margin.

The Company's management uses non-GAAP financial measures to gain an understanding of the Company's comparative operating performance (when comparing such results with previous periods or forecasts) and future prospects. The Company's non-GAAP financial measures exclude certain special items, including stock-based compensation charge, amortization of intangible assets, amortization of convertible debt issuance costs, gain on the sale of business and investments and gain on the sale of minority interest in subsidiary from its internal financial statements for purposes of its internal budgets. Non-GAAP financial measures are used by the Company's management in their financial and operating decision-making, because management believes they reflect the Company's ongoing business in a manner that allows meaningful period-to-period comparisons. The Company's management believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: 1) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose, and 2) in comparing in a consistent manner the Company's current financial results with the Company's past financial results.