March 3, 2010 (Chinavestor) Investors turned cautious on Wednesday before Sina Corp. (NASDAQ:SINA) released earnings, letting shares of the company slip $.64 or 1.68% during regular trading hours. And this caution paid off as it turns out: Sina reported dismal revenue growth for the fourth quarter while earnings slipped. And if this wasn't enough the company guided 2010 Q1 revenues below estimates... No wonder, shares of Sina Corp. (NASDAQ:SINA) are trading -5% lower in after hours trading.
As always, I like to look at current financial results from a little distance. As the following chart testifies, current quarterly revenues were all right and even earnings wouldn't call for a drastic revision but lower revenue guidance is certainly a cause for concern.
Considering that earnings growth is paramount in determining stock price, the red dotted line is the trend line of past and current earnings. Current earnings are slightly below the 3 year trend line and though the direction of earnings for the last quarter is no good, I wouldn't call it quits if it was only for that. The larger problem is outlook, or rather lack of it. The company estimated " that its non-GAAP net revenues for the first quarter of 2010 will be between $78.0 million and $80.0 million".
Given that SIna Corp. (NASDAQ:SINA) netted in $98.2 million in the last quarter, this represents a -20% decline!
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