Weibo bucks trend with positive earnings report, as 75pc of US-listed Chinese firms disappoint
Weibo Corp’s second-quarter revenue topped estimates, climbing 39 per cent to US$107.8 million on higher advertising and marketing sales at the Chinese social-media service controlled by Sina Corp.
Analysts had projected, on average, revenue of US$104.8 million, according to data compiled by Bloomberg. Net income was US$4.2 million, compared with a year-earlier loss of US$15.5 million, the Beijing-based company said in a statement Tuesday.
Weibo, which is backed by Alibaba Group, is competing with Tencent Holdings’s WeChat messaging application for users. Weibo has been forging television and movie partnerships, helping to boost the number of monthly active users by 36 per cent to 212 million in the latest period, chief executive officer Wang Gaofei said in the statement. WeChat has 600 million users.
Advertising and marketing revenues increased 47 per cent to US$87.9 million, Weibo said.
For the third quarter, Weibo forecast revenue of US$120 million to US$123 million, compared with analysts’ prediction for US$121.8 million.
The results come amid a disappointing earnings season for US-listed Chinese companies. A total of 10 out of 13 firms, including Baidu and Vipshop Holdings, have provided quarterly sales projections to US investors that were below analyst expectations.
"The generally weak sales outlook at big Chinese Internet firms definitely has an impact on companies that have yet to report earnings," said Henry Guo, an analyst at Summit Research Partners.
"Quite a few companies have given soft guidance amid China’s economic slowdown."