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What: Shares of Renren
So what: It was actually a very mixed quarter for the social networking company. In the first quarter, Renren reported a 56% rise in sales to $32.1 million and a loss of $0.03 per share. This was mildly better than Wall Street's expectations for a loss of $0.04 on sales of $29.7 million. Overall, online ad revenue rose by 15% while gaming revenue spiked 91%. However, Renren's second-quarter guidance wasn't up to par and slowing online ad revenue spending in China pre-empted the company to issue a revenue range of $41 million-$43 million -- well below the consensus estimate of $45.9 million.
Now what: Here we go with more of the same from Renren. Subtlety left out of the above results is that total expenses rose by 90%, squashing any sales gains and the hope of the company turning a profit. Renren seems quite content with growing at the expense of a profit at the moment. The only problem with that strategy is that China's economy is slowing and isn't going to be conducive to the growth rates the company has become accustomed to. I continue to remain pessimistic on Renren's near-term outlook and feel there are plenty of better opportunities for your money out there.
Craving more input? Start by adding Renren to your free and personalized watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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