Shares of Weibo (WB 0.03%) were gaining today after the company delivered a better-than-expected second-quarter earnings report. The Chinese social media platform that's often likened to Twitter still saw revenue slide in the quarter, but the performance was enough to please investors. As of 11:17 a.m. EDT on Monday, the stock was up 6.3%.
Weibo said that business was recovering as the coronavirus pandemic has been brought under control in China. In the quarter ended June 30, revenue fell 10%, or 7% on a constant-currency basis, to $387.4 million, which beat estimates at $379.9 million.
Revenue fell in advertising, which makes up the bulk of its business, and in value-added services, but its user base continued to grow, perhaps boosted by the stay-at-home effects of the pandemic. Monthly active users (MAUs) rose by 37 million from a year ago to 523 million, while daily active users were up 18 million to 229 million, and user growth should eventually lead to increased profitability.
Operating expenses remained roughly even from a year ago, and adjusted earnings per share fell from $0.68 to $0.50, which still topped expectations at $0.46.
CEO Gaofei Wang said, "With the COVID-19 pandemic situation in China largely brought under control, we are glad to see the solid recovery of our brand advertising business in the second quarter, with more brands embracing our differentiated social marketing solutions to connect with broader audience on Weibo."
For the third quarter, management actually called for revenue to fall anywhere from 5% to 7%, below the analyst consensus of a decline of 1.7%. That makes today's gains a bit surprising, but they come on the same day that stocks are up broadly on hope for another stimulus. Chinese stocks have also gotten a boost as that country is recovering more quickly from the pandemic. Investors have mostly ignored threats from the Trump administration against Chinese tech stocks, and Weibo is unlikely to be a target of them.