SINA, Caught In Pornography Crackdown, May Post Weak Q2
SINA (NASDAQ: SINA), operator of the most popular website in China, is set to post quarterly earnings Thursday for the first time since it lost its video license in April for allegedly hosting pornography in China.
In the company's second-quarter outlook published in May, the company lowered its earnings guidance, apparently taking into account the resulting lost advertising revenue.
Advertising benefits from the World Cup matches from June 12 to July 13 were out the window.
The company is expected to post second-quarter earnings of $0.09 per share on revenue of $179.2 million.
T.H. Capital's Tian X. Hou said Sina will just meet lowered second-quarter revenue expectations.
Hou downgraded Sina earlier this week to Hold from Buy and said the company is likely to offer third-quarter outlook below or in line with the current Wall Street forecast. Hou sees weakness stemming from both the video license loss, as well as a sluggish Chinese economy that has put a damper on ad spending.
Sina's investment in its business is lagging peers like Tencent, Baidu and NetEase.
"Sina needs to invest in verticals as well as mobile," Hou said. "But these investments may not see results until a few quarters down the road."
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