SINA Corp. (SINA) reported a loss of 21 cents per share in the first quarter of 2012, deteriorating drastically from the year-ago earnings of 25 cents per share. The weaker-than-expected result was primarily attributed to higher operating expenses in the quarter.
Including stock-based compensation of $3.8 million but excluding one-time items amounting to $4.1 million, loss per share stood at 27 cents, in line with the Zacks Consensus Estimate.
Quarter Details
Total revenue (excluding deferred revenue) increased 6.3% year over year to $101.5 million in the reported quarter, slightly above the low end of management’s guided range of $101.0 million to $104.0 million.
The year-over-year growth in total revenue was primarily driven by higher advertising revenue in the quarter, up 8.6% to $78.5 million on a non-GAAP basis and marginally ahead of the low end of management’s guidance range of $78.0 million to $80.0 million.
Non-advertising revenue inched down 0.8% year over year to $23.0 million in the quarter. This was in line with the low end of the company’s guided range of $23.0 million to $24.0 million. MVAS revenue was $19.0 million, slightly down from $21.3 million in the year-ago quarter.
Gross profit on a non-GAAP basis declined 8.7% year over year to $44.4 million in the quarter. Gross margin declined to 43.8% in the quarter from 51.0% in the prior-year quarter.
Advertising gross margin declined to 43.9% from 54.3% in the prior-year quarter. The year-over-year decline was primarily due to increased spending on bandwidth and content and higher personnel related costs. Non-advertising gross margin expanded 270 bps to 43.3% from 40.3% in the year-ago quarter. Mobile-value-added-services (:MVAS) gross margin remained flat at 39.0%.
Operating loss, excluding one-time items and charges, came in at $22.7 million in the quarter compared with a profit of $7.1 million in the prior-year quarter. The year-over-year decline was primarily driven by higher operating expenses, which increased 61.4% year over year on the back of higher marketing expenditure, personnel-related expenses and infrastructure costs related to Weibo.com.
Interest and other income increased 31.0% year over year to $3.5 million in the reported quarter. Net loss on a non-GAAP basis was $17.8 million versus income of $13.9 million in the year-ago quarter.
SINA exited the first quarter with cash, cash equivalents and short-term investments of $647.9 million compared with $673.5 million at the end of the fourth quarter. Cash outflow from operating activities in the quarter was $10.5 million.