SINA Corporation Keeps Moving Forward

IMAGE SOURCE: SINA CORPORATION.

SINA Corporation (SINA +0.00%) released fourth-quarter 2015 results last Thursday, showing the Chinese web giant is not only still enjoying the outsized growth generated by its large stake in microblogging website Weibo (WB +0.52%), but that it is also continuing to take steps toward monetizing its core portal business. Let's have a closer look at how SINA closed out its fiscal year.

SINA's results: The raw numbers

DATA SOURCE: SINA CORPORATION.

What happened with SINA this quarter?

• Based on generally accepted accounting principles (GAAP), SINA's net income fell 75.6% year over year to just under $14.6 million million, or $0.21 per diluted share. But similar to last quarter's GAAP net income decline, note last year's reported fourth-quarter net income included more than $53 million in one-time gains related to the sale of investments.
• Online advertising revenue grew 22.7% year over year, to $223.2 million, while non-advertising revenue grew 13.1%, to just over $33 million.
• Within the former, Weibo advertising and marketing revenue climbed 41.6% year over year, to $149 million, offsetting a slight decline in SINA's portal advertising revenue, to $93.6 million.
• Montly active users at Weibo grew 34% on an annual basis to 236 million, and daily active users increased 32% to 106 million. Mobile daily active users rose 46%.
• Mobile advertising revenue at Weibo increased 77% year over year, representing 65% of its total ad sales.
• Mobile portal advertising revenue more than tripled year over year in 2015, accounting for more than 30% of total portal ad sales.
• Non-advertising revenue growth was driven by a $2.3 million increase in Weibo value-added services and a $1.5 million increase in portal non-advertising sales.
• For the full year, reported net revenue climbed 14.6% year over year, to $880.7 million. Adjusted (non-GAAP) revenue rose 15.1% in 2015, to $870.2 million, near the high end of guidance for full fiscal 2015 adjusted revenue of $800 million to $900 million.
• Cash from operations was $98.9 million million, and capital expenditures were $15 million.
• SINA ended the year with $2.4 billion in cash, equivalents, and short-term investments as well as $800 million in convertible debt.

What management had to say 
SINA CEO Charles Chao expressed delight that the company was closing the year with strength in both Weibo and the portal side of the business. He also said:

2015 was a remarkable year for Weibo. Our user community continues to grow at a rapid pace, our user engagements are improving, our operations are optimized andWeibo monetization is showing strong momentum. We are particularly encouraged by Weibo's strong performance in the mobile and social landscape. [...] On the portal side, we have prioritized mobile strategy and have witnessed meaningful increase in share of mobile traffic and consistent improvement in mobile monetization. To further leverage our brand equity and achieve long-term growth, we restructured the organization to better execute vertical strategy internally and formed strategic alliance with partners in the related vertical areas.

Looking forward 
For the full-year 2016, SINA expects adjusted revenue between $850 million and $950 million. This range excludes around $10.4 million in deferred license revenue from E-House, and assumes the Chinese yuan depreciates to the U.S. dollar at an average rate of 8.5% for the year.

Finally, SINA also approved a new share repurchase plan through which it can repurchase up to $500 million in ordinary shares through the end of June 2017. Any purchases are expected to be funded through SINA's cash balance.

In the end, SINA's latest report held few surprises. If anything, it contained more of the same steady reliance on Weibo and progress in its portal as we've seen over the past few quarters. That may not be enough to get the market excited about SINA stock right now, but I think investors should be more than pleased with where SINA's solid position is going into the new year.