SINA Corp. (SINA – Analyst Report) reported third-quarter 2014 earnings of 11 cents per share, which were much-better than the Zacks Consensus Estimate of 4 cents. However, earnings declined from 35 cents per share reported in the year-ago quarter.

Quarter Details

Revenues (adjusting for deferred revenues of $2.6 million, mostly related to license agreements pertaining to the E-House/CRIC transaction) increased 9% year over year to $196 million and were in line with the mid-point of management’s guided range of $193 million to $199 million. Revenues however missed the Zacks Consensus Estimate of $198 million.

Advertising revenues moved up 10% from the year-ago quarter to $166.8 million. The year-over-year growth in online advertising revenues resulted from an increase of $21.7 million in Weibo advertising revenues, offset by a decline of $6.5 million in portal advertising revenues.
    
Non-advertising revenues decreased 3.8% year over year to $31.8 million in the quarter. Non-GAAP non-advertising revenues for the third quarter of 2014 were $29.2 million compared with $28.4 million reported in the prior year quarter. The year-over-year change in non-GAAP non-advertising revenues was mainly due to an increase of $9.1 million in Weibo value added services (VAS) revenues, partially offset by a decline of $7.4 million in mobile value added services (MVAS) revenues.

Weibo revenues jumped 58% year over year to $84.1 million. Monthly active users for month of September grew 36% on a year-over-year basis to 167 million in the reported quarter. Portal revenues declined 12.8% year over year to $114.5 million.

Gross margin declined 10 basis points to 63% in the reported quarter. Advertising gross margin for the third quarter of 2014 was 62% versus 64% reported in the prior-year quarter. Non-advertising gross margin for the third quarter of 2014 was 67%. Non-GAAP non-advertising gross margin for the third quarter of 2014 was 64% compared with 58% in the year-ago quarter, resulting from a shift in revenue mix from low-margin MVAS to higher margin Weibo VAS.

Non-GAAP operating expenses for the third quarter of 2014 totaled $127.1 million compared with $90.5 million in the prior year quarter, primarily due to higher personnel costs, marketing expenditures and bad debt expenses.

SINA reported net income of $6.9 million or 11 cents compared with $23 million or 35 cents reported in the year-ago quarter.

SINA exited the third quarter with cash, cash equivalents and short-term investments of $2.30 billion, which remained flat sequentially. Cash provided by operating activities in the third quarter was $100.4 million.