SouFun Holdings Ltd. SFUN reported operating net loss of 24 cents per share in the first quarter of 2016, wider than the Zacks Consensus Estimate of a loss of 7 cents. The company had earned 2 cents per share in the year-ago quarter.
A higher level of expenses offset the revenue improvement, resulting in a loss in the quarter.
Behind the Headlines
Total revenue of SouFun was $204.6 million in the quarter, up 62.3% year over year on growth in e-commerce services. Soft performance in marketing services limited the upside. However, revenue growth was the highest in the last five years.
Digging deeper, marketing services’ revenues decreased 25.1% year over year to $30.4 million.
Revenues from e-Commerce services (contributing nearly 70% to total revenue) skyrocketed 154% year over year to $142.6 million on higher real estate brokerage services for secondary homes. Listing services revenues moved up 2% to $24.1 million. While Internet financial services revenues increased 200% on increased financial services to the real estate brokerage services, other value-added services revenues improved 27% year over year, largely on the strength of an increase in real estate data-related services.
Operating expenses increased 44.3% and selling expenses rose 27.3% owing to an increase in advertising and promotion expenses. General and administrative expenses also increased 77.9%.
The company incurred an operating loss of $110.2 million in the reported quarter. The year-ago quarter on the other hand had seen an operating income of $7.5 million.
Before income tax, interest expenses, interest income, depreciation and amortization, the company suffered an adjusted loss of $100.4 million. In the year-ago quarter, the company’s adjusted earnings before income tax, interest expenses, interest income, depreciation and amortization (EBITDA) was $11.3 million.
SouFun exited the first quarter with cash and cash equivalents of $567 million, down 31% from the 2015-end level.
Cash used in operating activities was $67.2 million the quarter compared with $54.7 million used in the year-ago quarter.
SouFun raised its revenue guidance to $1.15 billion for 2016 (from $1.06 billion guided earlier), which translates into a 30% year-over-year increase.
SouFun presently carries a Zacks Rank #5 (Strong Sell).
Performance of Other Business Service Providers
The bottom line at Core-Mark Holding Company, Inc. CORE, ExamWorks Group, Inc. EXAM and Performant Financial Corporation PFMT outperformed their respective Zacks Consensus Estimate in their latest releases.
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SOUFUN HLDG-ADR (SFUN): Free Stock Analysis Report
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