(Reuters) - Chinese internet company Sina Corp eked out a profit in the third quarter that beat analysts’ estimates as strong advertising sales on its microblogging platform offset weaker website advertising but it forecast current-quarter revenue below expectations.
Shares of the company fell 6 percent to $49.72 in extended trading. They closed at $53.10 on the Nasdaq on Thursday.
Sina expects adjusted net revenue to range between $132 million and $136 million in the fourth quarter, with advertising revenues forecast to increase between 6 percent and 8 percent from a year earlier.
Analysts on average were expecting revenue of $151.9 million, according to Thomson Reuters I/B/E/S.
Sina, which makes most of its revenue from online advertising both on its website and through its microblogging platform, Weibo, is facing stiff headwinds this year as firms slash advertising budgets due to a worsening economic outlook.
Analysts said the spat between Japan and China over a few uninhabited islands in the East China Sea may have affected Sina’s website advertising sales as Japanese automakers cut back on advertising in China.
Net profit was $9.9 million for the September quarter, compared to a loss of $336.3 million a year earlier. The profit beat analysts’ expectations of $7.5 million.
Sina’s advertising revenue rose 19 percent to $120.6 million in the third quarter, while non-advertising revenue rose 9 percent to $31.8 million. Overall net revenue was $152.4 million, up from $130.3 million, a year earlier.
The company started monetizing Weibo by offering special services to business accounts and selling VIP memberships to regular users earlier this year.
Weibo contributed about 10 percent to total advertising revenue in the second quarter and had 368 million registered accounts.
Reporting By Melanie Lee in Shanghai & Aurindom Mukherjee in Bangalore; Editing by Sriraj Kalluvila