NQ Mobile, the Chinese mobile-services provider that Muddy Waters accused of inflating revenue, posted third-quarter profit that beat analysts' estimates as sales of game and security software rose. Net income more than doubled to US$17.4 million in the three months to September from US$8.13 million a year earlier, NQ Mobile said in a statement on Tuesday. That beat the US$16.2 million average analyst estimate. NQ Mobile shares closed in New York on Tuesday up 6 per cent at US$14.31, but are still down about 40 per cent since October 24. That was when Muddy Waters, the research firm founded by short seller Carson Block, initiated coverage of the company with a strong sell rating, saying it inflated sales and misrepresented cash balances. NQ Mobile, which has headquarters in Beijing and Dallas, denied the allegations. On November 6, it said it completed the transfer of US$103 million in cash to an account at Standard Chartered to demonstrate its reserves. "Strong earnings, strong revenue, strong outlook, management buying stock," said Tim Ghriskey, the chief investment officer at Solaris Group. "You could see quite a short squeeze in the shares in a situation like this, but clearly it is volatile." Sales in the third quarter rose 110 per cent to US$54.2 million, NQ Mobile said. That compares with an average analyst estimate of US$50.98 million. NQ Mobile forecast revenue for the fourth quarter of as much as US$63 million, more than the mean US$61.2 million estimate of five analysts. That would bring sales for this year to as much as US$192 million, the company said, the most on record. Separately, NQ Mobile said its senior management, including co-chief executives Omar Khan and Henry Lin and president Zemin Xu, would buy US$3 million of American depositary shares with their personal funds in the next six months.