Shares of 58.com (NYSE: WUBA), a leading online marketplace operator in China, jumped on Monday following a strong second-quarter report. Surging revenue and soaring profits easily beat analyst expectations, and the company's guidance called for continued double-digit growth during the third quarter. At 11:15 a.m. EDT, the stock was up about 11.5%.
58.com reported second-quarter revenue of 2,593 million renminbi, or $382.8 million, up 33.3% year over year and $45.6 million higher than the average analyst estimate. Membership revenue totaled RMB963.7 million, or $142.3 million, up 28.2% year over year. The company now has 2.46 million members across its platforms, up 24.8% year over year.
Online marketing revenue was RMB1,536.5 million, or $226.8 million, up 36.6% year over year. 58.com pointed to increasing adoption and effectiveness of its marketing services as the main drivers of the growth.
Non-GAAP diluted earnings per ADS came in at $0.66, well above the $0.20 expected by analysts. Higher revenue was main reason for the earnings surge. CEO Michael Yao discussed some of the highlights of the quarter:
In addition to beating analyst estimates for revenue and earnings, 58.com's third-quarter guidance came in above analyst expectations. The company expects revenue to grow by 24.8% to 29.7% year over year, to a range of $382 million to $397 million. Analysts were expecting revenue guidance of $351 million.
With strong growth in the second quarter and a better-than-expected outlook, investors have every reason to bid up the stock.
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