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E-Commerce China Dangdang Misses Where it Counts

By | More Articles
August 16, 2012 | Comments (6)

E-Commerce China Dangdang (NYSE: DANG  ) reported earnings on Aug. 16. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended June 30 (Q2), E-Commerce China Dangdang beat slightly on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP loss per share increased.

Margins contracted across the board.

Revenue details
 E-Commerce China Dangdang booked revenue of $190.1 million. The 10 analysts polled by S&P Capital IQ foresaw revenue of $186.7 million on the same basis. GAAP reported sales were 55% higher than the prior-year quarter's $122.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at -$0.23. The nine earnings estimates compiled by S&P Capital IQ averaged -$0.21 per share. GAAP EPS were -$0.24 for Q2 compared to -$0.06 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 13.1%, 120 basis points worse than the prior-year quarter. Operating margin was -10.4%, 380 basis points worse than the prior-year quarter. Net margin was -10.1%, 650 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $215.6 million. On the bottom line, the average EPS estimate is -$0.23.

Next year's average estimate for revenue is $865.3 million. The average EPS estimate is -$0.87.

Investor sentiment
 The stock has a two-star rating (out of five) at Motley Fool CAPS, with 174 members out of 237 rating the stock outperform, and 63 members rating it underperform. Among 35 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 17 give E-Commerce China Dangdang a green thumbs-up, and 18 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on E-Commerce China Dangdang is hold, with an average price target of $7.70.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 16, 2012, at 11:11 AM, flat123 wrote:

    another motley bash who is paying these people? this would be artical 6 in the last 3 days

  • Report this Comment On August 16, 2012, at 11:20 AM, jhlblais wrote:

    SETH JAYSON - You are an idiot, and so is the other Motley Fool writer.....Justin Loiseau.

    You constanly BASH dangdang stock with negative articles......4 negative articles in the last four days .......ever heard of OVER-KILL, with your horrible reporting, that presents a very very BIASED view.

    Its shows your taking Hedge fund money to write such trash, as these Hedge Funds are short and pay to write this TRASH to try and keep the stock price down.

    Your company has very little paid subscribers and must accept this money to keep the lights on and the office open.

    WHAT A JOKE YOU AND Justin Loiseau are !!

    And you present a very weak investment thesis as well...

    No wonder no-ones pays any attention to what MF says anymore, its a cheap on-line fish wrap newsletter !

  • Report this Comment On August 16, 2012, at 11:28 AM, Zonata3 wrote:

    We are investing in growth company...DangDang post stronger growth than expected even in a currently fierce battle conditions. What should we expect more? This is getting ridiculous... try to be objective next time...

  • Report this Comment On August 16, 2012, at 12:06 PM, jasonmooore222 wrote:

    The total valuation is rediculous at this point. DangDang market cap is about 400million U.S. dollar but for this past quarter its total revenue is already 192million U.S. dollar so for 2 quarters(half year) their total revenue is equivalent of their market cap? It should be their market cap is 4-6 times bigger than their total revenue they can generate. If they are generating around 800 millions revenue a year and given their market cap is only half of that, the share value should double from 5 to 10 just based on the yearly revenue senerio. But normally the market cap is3-5 times larger than that. So it should be reasonable to arrive around 30-50 dollars. That is just my 3 cents. You may disagree. But again selling at this low, 5 bucks, is rediculous.

  • Report this Comment On August 16, 2012, at 12:14 PM, Xavicat14 wrote:

    Considering the insane battle in prices in chinese B2C companies, DangDang numbers are not bad at all. 360buy margins are at 5%.

  • Report this Comment On August 16, 2012, at 7:15 PM, jsIRA wrote:

    DangDang has over ten years of history in China. All others are new comers.

    The company executed the expansion plan well and used the IPO money on the target.

    DangDang will be the eventual winner.

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