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Summary

  • Renren earnings posted after the bell on Monday.
  • They were just as poor as analysts were expecting.
  • The stock already had this news priced in and is hardly changed after hours.

We reported early this morning that China social media company Renren (NYSE:RENN) was going to be reporting after the bell today. We were expecting yet another dismal quarter from the company as it waits to get out mobile video games that it can hopefully monetize.

The company reported results after the bell and they were as ugly as we had imagined. Here are the metrics the company reported:

  • Total net revenues were US$25.0 million, a 42.4% decrease from the corresponding period in 2013.
  • Renren net revenues were US$15.1 million, a 26.7% decrease from the corresponding period in 2013.
  • Games net revenues were US$9.9 million, a 56.6% decrease from the corresponding period in 2013.
  • Gross profit was US$9.1 million, a 65.0% decrease from the corresponding period in 2013.
  • Operating loss was US$30.4 million, compared to an operating loss of US$25.9 million in the corresponding period in 2013.
  • Net income attributable to the Company was US$31.3 million, compared to a net loss of US$9.3 million in the corresponding period in 2013.
  • Adjusted net income (1) (non-GAAP) was US$37.4 million, compared to an adjusted net loss of US$3.8 million in the corresponding period in 2013.

The company disclosed that their board had authorized a new share repurchase program for up to $100 million of the company's ADSs that expires a year from June 28, 2014. Repurchases would be the last thing I'd be worried about after posting the financials the company did, however.

With the company showing massive YOY declines in net revenue, total revenue, games net revenue and gross profit, all eyes are going to be on whether or not they can move into China's emerging mobile gaming market.

With mobile gaming being the only hope this company has, we continue to see no long-term prospect in owning this name. We believe this to be a failing version of Facebook (NASDAQ:FB) in China whose only hope is to try and go the route of Zynga (NASDAQ:ZNGA) - another company that took on massive losses from trying to monetize mobile gaming.

Source: Update: Renren Earnings Fall Flat