Linktone Beats Recent Management Guidance By $0.01; Sees Q1 EPS Below Consensus (LTON)

Feb.27.06 | About: Linktone Ltd. (LTON)

Linktone (ticker: LTON) reported Q4 2005 earnings results earlier today. The company pre-announced Q4 2005 results earlier this month that were significantly below analyst estimates.

The company will be holding a conference call this morning to discuss the latest results. We will post a transcript of that call shortly after the call's conclusion (note: we will also be publishing transcripts of today's other China earnings calls including KONG, HRAY, JOBS, SNDA, and NINE throughout the day). Key stats:

Q4 2005 Results:

  • Gross revenue rose 32% y-o-y to $20.6 million in-line with recent management guidance of $20.4 - $20.6 million. Analysts estimated revenue of $20.34 million.
  • GAAP net income fell 22% y-o-y to $1.5 million, and fell 64% sequentially.
  • GAAP net income of $0.05, above recent management guidance of $0.03 - $0.04.
  • Non-GAAP net income fell 55% y-o-y to $1.9 million, and fell 60% sequentially.
  • Non-GAAP net income of $0.07, compared to $0.17 in 3Q05 and $0.15 in 4Q04.
  • Q1 2006 Guidance:

  • Gross revenue of approximately $21 million, above consensus estimate of $20.51 million.
  • GAAP net income of $0.08 per ADS.
  • Non-GAAP income of $0.09 per ADS, below consensus estimate of $0.14.
  • The Company Attributes Lower than Expected GAAP Net Income to the Following:

  • Additional costs associated with increased revenue share payments to content providers and co-marketing partners reflecting a greater percentage of revenues derived from third party content and services.
  • Certain marketing programs that failed to produce anticipated top-line revenue returns and certain personnel turnover that resulted in decreased efficiency for the quarter.
  • Increased expenditures due principally to the Company's continued investment in media advertising, which the Company increased in the fourth quarter to maintain its position in the market, and in new businesses and product lines.