Why Fang Holdings Limited Stock Lost 16.5% in July

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.

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.

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:

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.