Sector Snap: Chinese Internet stocks mostly decline

Chinese Internet stocks mostly declined Tuesday, with shares of CDC Corp. falling after the company said its fourth-quarter loss widened and said that, according to preliminary results, its first-quarter revenue came close to analysts' views.

The Chinese software, gaming and Internet service provider's shares fell 21 cents, or 5.6 percent, to $3.56.

Late Monday, CDC said its fourth-quarter loss widened to 67 cents per share from 2 cents per share, a year earlier, hurt by various one-time expenses, including some related to the carve-outs of its CDC Games and CDC Software businesses.

On an adjusted basis, CDC's loss totaled 3 cents per share.

CDC's revenue rose to $107.7 million from $89.4 million.

Analysts polled by Thomson Financial expected adjusted earnings of 5 cents per share on sales of $104.6 million.

Also Monday, CDC said that it expects $98 million in first-quarter revenue. Analysts expect $98.6 million, according to Thomson.

In a client note Tuesday, Brean Murray Carret & Co. analyst Andrey Glukhov kept a "Hold" rating on the stock and lowered his 2008 and 2009 earnings-per-share estimates, saying he expects CDC to about break even in 2008.

Glukhov was disappointed by the company's fourth-quarter pro forma operating and net losses and said it appears CDC is experiencing first-quarter softness in applications software demand.

Meanwhile, shares of Internet portal operator Sina Corp. declined $1.45, or 3 percent, to $46.26.

Kaufman Bros. analyst Jason Avilio downgraded the stock to "Hold" from "Buy" in a client note Tuesday, noting that the stock has risen about 35 percent since the start of April, passing his $44.50 price target.

Competitor Sohu.com Inc.'s shares rose 82 cents to $71.63 and earlier traded as high as $72.39.

Elsewhere, American Depositary Shares of Web search engine operator Baidu.com Inc. rose $10.02 to $370.38.

Citi Investment Research analyst Jason Brueschke raised his rating on the stock to "Buy" from "Hold" and raised his price target to $415 from $350, saying the company's seasonally weakest quarter has passed and he expects it to continue to control costs going forward.