51Job beats by $0.01; issues EPS guidance below consensus; margins weaken (JOBS 2Q05 earnings results)

51Job (ticker: JOBS) reported Q2 2005 earnings results that beat both consensus revenue and EPS estimates. Key stats from the quarter:

Q2 Results:
(all percentage changes and comparisons are year on year, unless stated otherwise)

• Total revenue rose 26.2% to $17.8 million vs consensus estimate (1 analyst) of $16.4 million.
• Net revenue rose 25.4% to $16.8 million.
• Print advertising revenue rose 22.4% to $10.9 million.
• Online recruitment service revenue rose 52.5% to $4.7 million.
• Executive search revenue fell 3.5% to $852,386.
• Other human resource and related revenue rose 9.4% to $1.3 million.
• Gross Margin was 47.4% vs 48.7%.
• Operating expenses rose 64.2% to $6.2 million.
• Sales and marketing expenses rose 69.8% to $3.3 million.
• G&A expenses rose 73.7% to $2.6 million.
• Operating income fell 27.9% to $2.2 million.
• Operating margin was 12.5% vs 21.8%.
• Net income fell 3.1% to $1.9 million.
• Net margin was 10.8% vs 14.0%
• Diluted EPS of $0.07 vs consensus estimate (2 analysts) of $0.06.

Balance Sheet

• Cash and equivalents of $105.8 million as of June 30, 2005.

Q3 Guidance

• Revenue of $18.0 - $19.0 million vs consensus of $18.2 million.
• Fully diluted earnings per ADS of $0.05 -$0.07 -– but also guided for a foreign currency translation loss that will reduce these numbers by $0.03 - $0.04 per ADS. Consensus estimate of $0.08.