Sina.com, one of three Chinese Internet companies listed on the Nasdaq, said slower advertising sales and start-up costs of an online game venture will stall earnings growth in the first three months of this year, after Sina posted its first-ever profit.
Sina.com is expecting its January to March per-share earnings of at least 3 U.S. cents per share, Chief Executive Daniel Mao said.
He was speaking after the company reported profit of US$1.5 million, or 3 U.S. cents a share, in the second quarter ended on December 31. That turned from a year-earlier loss of US$4.9 million.
"The March quarter traditionally is the low season for advertising because of the Chinese New Year," Mao said. "There are a couple of factors that will offset the growth in profit. One factor is the startup of the game business."
Sina owns 51 percent of an online game venture set up in November with South Korea's Ncsoft Corp.
"There will be some losses from the game operation in the first quarter," Mao said. "We're not planning to charge fees until probably the end of March."
Sina.com said advertising sales won't drop by more than 5 percent in the current quarter, as the Spring Festival holiday stalls business activity. Non-advertising revenue is expected to rise about 70 percent, helped by Sina's US$20.8 million acquisition of mobile-services provider Memestar earlier this month.
Shares in China's three Nasdaq-listed Internet firms surged over the past year as the providers expanded into mobile phones, collecting revenue from mobile phone users who send messages, news and photographs using their handsets.
Sina shares fell 14.3 percent to US$8.90 on the Nasdaq market in New York on Monday.
(eastday.com January 29, 2003)