SINA Grows Stronger by the Day

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SINA Corporation (NASDAQ: SINA) announced second-quarter 2017 results on Wednesday morning, highlighting an acceleration in growth at Weibo and continued progress monetizing mobile traffic at its core portal business. Even so, shares of the Chinese online media specialist were little changed on the day.

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Let's take a closer look at what SINA accomplished over the past few months, as well as what investors can expect from the company going forward.

SINA's results: The raw numbers

Metric

Q2 2017

Q2 2016

Year-Over-Year Growth

GAAP net revenue

$358.9 million

$244.0 million

47.1%

GAAP net income attributable to SINA

$23.4 million

$43.3 million

(46%)

GAAP net income per diluted share

$0.31

$0.59

(47.5%)

What happened with SINA this quarter?

  • On an adjusted (non-GAAP) basis, revenue increased 47.6% to $356.3 million.
  • Adjusted net income attributable to SINA -- which excludes items like stock-based compensation and gains/losses on the sale of investments or businesses -- was $52.7 million, or $0.70 per share, up from $19.9 million, or $0.27 per share in the same year-ago period.
  • For perspective -- and though we don't usually pay close attention to Wall Street's demands -- consensus estimates predicted lower adjusted earnings of $0.57 per share on lower revenue of $339.1 million
  • Online advertising revenue climbed 44% year over year to $295.2 million, accelerating from 39.9% year-over-year growth last quarter. Weibo was largely responsible for this strength, as the microblogging platform delivered 72% growth in online advertising revenue. 
  • Adjusted non-advertising revenue climbed 68.6% to $61.2 million, thanks to a combination of growth in both Weibo membership fees and SINA's online finance business.
  • Weibo monthly active users climbed 28% year over year to 361 million in June. Ninety-two percent of those users came from Weibo's mobile platform.
  • SINA generated cash from operations of $238.3 million during the quarter and ended the period with $2.1 billion in cash.
  • In late May, the company announced the planned distribution of one Weibo share for every 10 outstanding SINA shares as of the record date of June 7, 2017. As such, SINA reduced its equity stake in Weibo to 46% from 49%, but it still holds roughly 72% of Weibo's voting power.
  • SINA's board approved an extension to its $500 million share repurchase plan, making it effective through June 30, 2018.

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What management had to say

SINA Chairman and CEO Charles Chao stated:

We are delighted with the financial results for the second quarter of 2017. Weibo has further strengthened its social platform network effect and delivered solid user base expansion, accelerated revenue growth and continuing operational leverage. For SINA business, we have continued to witness healthy growth of mobile traffic from SINA media properties and improved mobile monetization. We are also pleased to see the progression we made in our online finance business.

Looking forward

SINA doesn't offer guidance on a quarterly basis. And it didn't provide any changes to its latest full-year guidance, which, as a reminder, calls for 2017 adjusted revenue of between $1.30 billion and $1.44 billion. Though for what it's worth, consensus estimates predict SINA's sales will arrive at the high end of that range when all is said and done this year. If anything, this was yet another solid -- if slightly better-than-expected -- quarter with no big surprises.

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Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Sina. The Motley Fool has a disclosure policy.