Tom Online reports in-line with earnings estimates and guides above consensus; wireless revenue shows strong sequential growth (TOMO 2Q05 earnings results)

Tom Online (ticker: TOMO) reported Q2 2005 earnings results
that beat consensus revenue estimates but were in-line with consensus earnings per ADS estimates. Key stats from the quarter:

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

• Revenue rose 38.5% to $42.8 million vs consensus estimate of $37.95 million.
• Revenue rose 21.2% sequentially.
• Wireless Internet revenue rose 41.0% to $40.7 million, and rose 21.6% sequentially.
• SMS revenue rose 2.0% to $15.4 million, and rose 22.3% sequentially.
• MMS revenue rose 29.3% to $2.6 million, and rose 36.7% sequentially.
• WAP revenue rose 122.0% to $7.8 million, and rose 5.0% sequentially.
• IVR revenue rose 26.0% to $10.3 million, and rose 23.6% sequentially.
• CRBT revenue rose 21.9% sequentially to $3.3 million.
• Online advertising revenue fell 3.9% to $1.8 million, but rose 15.9% sequentially.
• Gross margin was 41.6% vs 50.6%, and 39.4% in Q1 2005.
• Operating expenses rose 33.9% to $8.5 million.
• Sales and marketing expenses were flat at $2.0 million.
• G&A expenses rose 115.1% to $5.9 million.
• Product development expenses rose 72.9% to $358,000.
• EBITDA fell 3.3% to $11.3 million, but rose 13.0% sequentially.
• Operating income rose 0.4% to $9.3 million, and rose 15.8% sequentially.
• Operating margin was 21.8% vs 30.1%, and 22.8% in Q1 2005.
• Net income rose 1.8% to $10.2 million, and rose 11.8% sequentially.
• Net margin was 23.9% vs 32.6%.
• Earnings per ADS of $0.195 vs consensus estimate of $0.20.

Q3 Guidance

• Total revenue of $42.0 - $43.5 million vs consensus estimate of $41.4 million.

Balance Sheet (as of June 30, 2005)

• Cash and equivalents of $52.0 million.
• Short-term bank deposits of $1.5 million.

TOMO chart.

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