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Chinadotcom Revenues Meet Estimates, Cuts Jobs
Chinadotcom Corp, said on Thursday third-quarter revenues met estimates, but the bellwether Asia-focused Web company warned of flat ad revenue growth, and cut about 44 jobs in its Web solutions unit.
The Hong Kong-based firm said its operating results were hurt by a slowdown in advertising spending by pure Internet companies and by the strength of the US dollar.
Its third-quarter loss, including an US$18 million loss for non-cash expenses, widened from the second quarter to US$20.5 million, or 21 cents a share. Analysts had expected the company to post a loss in the range of US$13.7 million to US$18 million.
Revenues for the quarter rose to US$36.5 million from US$30.3 million, driven by strong growth in its e-business. The e-business growth offset the slowdown in ad revenues, which fell 11 percent sequentially to US$12.2 million.
Chief Executive Peter Yip said in a phone interview the Internet media and services company's relative maturity and business mix helped it post revenue growth.
Analysts on average in Hong Kong had expected it to post revenues of US$34.7 million, with projections ranging from US$33.4 million to US$36.2 million.
Page views showed 55 percent growth to over 32.5 million, while registered users grew 59 percent to 10 million.
While the company has seen stronger ad growth in the first month of the fourth quarter, Yip said the coming quarters will be difficult for advertising, which comprises less than 40 percent of its total revenues.
``We don't think Asia any exception nor immune from (the) global slowdown in ad revenues,'' Yip said. ``We experienced the same kind of exposure to dot-com slowdown, especially in the Hong Kong meltdown,(as the global sector).''
The company, which is the first of China-focused Web firms to list in the US, expects growth in its e-business unit and new services such as its e-mail advertising programs to help offset the slowdown in the near-term.
Although Yip said the e-business is seeing growth, Chinadotcom decided to cut about 44 people, or 4 percent of its 1,100 staff, from its Web Connection e-business consulting group.
He said the company continues to consolidate the business as it takes out overlap from some of its recent acquisitions.
Chinadotcom has US$485 million in cash.
``We have been acquiring consistently in the Web solutions space,'' Yip said. ``We are on the lookout for a portal to acquire but are particularly sensitive to recent Chinese regulations, especially on news and content. We want to see that settle down before we do anything too expensive.''
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