Feb. 20 (Bloomberg) -- Sina Corp., owner of China’s largest Twitter-like service, jumped in post-market New York trading after posting an unexpected profit and forecasting higher sales.
The company jumped as much as 7.8 percent from the price at the end of regular trading yesterday. It reported fourth-quarter net income of $2.4 million after the market close. Analysts had expected a $900,000 loss, based on the average of seven estimates compiled by Bloomberg.
Sina also expects sales to rise at least 8 percent this quarter helped by rebounding economic growth and the number of users on its Weibo micro-blogging site surpassing 500 million. The Shanghai-based company is also developing applications for mobile devices to help fend off competition from Tencent Holdings Ltd.’s WeChat.
“First-quarter profit is estimated to improve from last year due to better ad sales on a stronger economy,” said Echo He, an analyst at Maxim Group LLC in New York. Cost control was also “better than estimated” in the last quarter, she said.
Sina rose as high as $57.66 in aftermarket trading. During regular hours, it fell 4.5 percent to $53.48.
The company’s ad sales increased 7 percent in the fourth quarter to $110.7 million, according to a statement. Overall revenue rose 4.3 percent to $139.1 million. Net income dropped 75 percent from a year earlier.
Baidu Inc., the operator of China’s largest search engine, posted the slowest profit growth in almost four years in the three months ended December. Fourth-quarter net income at Sohu.com Inc. fell 9 percent, according to a Feb. 4 statement.
Sina predicted first-quarter non-GAAP sales of $115 million to $119 million, including advertising revenue of $94 million to $96 million. More than 30 percent of advertising revenue on Weibo could come from mobile devices, Chairman and Chief Executive Officer Charles Chao said on a conference call.
“Everyone is talking about mobile Internet,” he said. “It’s like an investment bubble in the market.”
The number of registered users on Sina Weibo rose 73 percent last year to 503 million, according to the company. The average number of daily users was 46.2 million in December, 82 percent more than a year earlier. The speed of growth of active Weibo users slowed to 9 percent in the fourth quarter, Chao said.
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