Sina Corp, operator of China's third-most-visited website, reported fourth-quarter profit that missed analysts' estimates after sales dropped and the company raised spending to add services.
Net income rose to $372.1 million, or $6.03 a share, from $25.2 million, or 42 cents, a year earlier, boosted by a one-time gain stemming from a reorganization, the Shanghai-based company said today in a statement. Excluding some items, earnings were 31 cents a share, missing the 36 cents predicted on average by analysts in a Bloomberg survey.
Sina offered a wider range of Web services, such as a microblogging site and videos, to lure users and attract more ads. Advertisers increased their spending on Internet marketing 21 percent to 20.6 billion yuan ($3 billion) last year in China, the world's biggest online market by subscribers, according to research company IResearch.
"What Sina needs to do is to diversify its services," Vivian Li, an Internet analyst at Piper Jaffray in Hong Kong, said before the announcement. "We remain very positive about the outlook" for the Chinese Internet market, she said.Sina's sales dropped 3.3 percent to $98.2 million last quarter.
The Chinese company fell 1.7 percent to $37.49 in Nasdaq Stock Market trading today before the announcement. The stock has declined 17 percent this year.
Visitors to Sina's website trail only those for Baidu Inc, China's biggest search engine, and Tencent Holdings Ltd, the country's biggest provider of online chat services, according to data compiled by Baidu.
First-quarter revenue may be $78 million to $80 million, Sina forecasted Wednesday. That compares with the $83.5 million average of estimates compiled by Bloomberg.
