China Finance Online Beats By $0.01; Expenses Rise; Investors Yawn (JRJC 3Q05 Earnings)

China Finance Online (ticker: JRJC) reported Q3 2005 earnings results today that beat consensus EPS estimates by $0.01. There was no after-hours trading in the company's stock. Key stats from the quarter:

Q3 Results
(all percentage changes and comparisons are year on year, unless stated otherwise)

• Gross revenue rose 10.0% to $1.85 million.
• Net revenue rose 8.3% to $1.81 million, and was flat sequentially. Consensus estimate of $1.82 million.
• Gross margin was 94.0% vs 93.9%.
• Operating expenses rose 139.3% to $1.01 million.
• General and administrative expenses rose 194.2% to $306,000.
• Product development expenses rose 57.1% to $66,000.
• Sales and marketing expenses rose 156.7% to $539,000.
• Operating income fell 39.7% to $693,000, and fell 4% sequentially.
• Operating margin was 38.2% vs 68.7%.
• Net income fell 0.8% to $1.27 million, but rose 26% sequentially on one-time currency gain.
• Net margin was 70.3% vs 76.7%.
• Diluted EPS of $0.06 vs $0.07, and consensus estimate of $0.05.

Balance Sheet (as of September 30, 2005)

• Cash and equivalents of $63.3 million.

Q3 Stats
(all percentage changes and comparisons are year on year, unless stated otherwise)

• New subscribers fell 35% to 2,626.
• Repeat subscribers fell 19% to 1,910.
• Average subscription fee per subscriber (ASF) for new subscribers fell 24% to $166 but rose 1% sequentially.
• ASF for repeat subscribers fell 6% to $253 but rose 3% sequentially.

JRJC chart.