Youku Tudou Q2 Loss Widens Despite Higher Revenues

(RTTNews) - Youku Tudou Inc. (YOKU), the biggest online video company in China, on Tuesday reported a loss for the second quarter that widened from last year as double-digit growth in revenues was more than offset by higher costs and expenses.

Looking ahead, the company forecast a sequential increase in revenues for the third quarter.

Beijing-based Youku Tudou's bottom line has been in the red since its listing on the New York Stock Exchange. Although the Chinese internet market continues to grow, Youku Tudou's online video market now faces competition from other internet companies including Chinese search giant Baidu.

Youku Tudou, formed from merger of Youku and Tudou - China's two largest online video websites, said its second-quarter net loss widened to 164.44 million yuan or 0.88 yuan per ADS from 105.05 million yuan or 0.63 yuan per ADS last year. On a U.S. dollar basis, loss for the quarter was $26.5 million or $0.14 per ADS.

The latest quarter's results include acquisition of property and equipment of 85.0 million yuan and acquisition of intangible assets of 246.3 million yuan.

Adjusted loss for the quarter was 75.93 million yuan or $12.2 million, compared to net loss of 44.63 million yuan or $7.2 million in the same period last year. On a per ADS basis, adjusted loss was 0.41 yuan or $0.07 for the quarter.

On average, eight analysts polled by Thomson Reuters expected the company to report loss of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.

Youku Tudou's revenues for the quarter rose 27 percent to 958.72 million yuan from 753.46 million yuan last year. On a U.S. dollar basis, revenues for the quarter were $154.54 million. Analysts had a consensus revenue estimate of 980.61 million yuan for the quarter.

Advertising net revenues for the quarter were 915.5 million yuan, or $147.6 million, meeting the advertising net revenues guidance previously announced by the company.

The company attributed the growth in advertising revenues to the increased use of its advertising services by brand advertisers, as evidenced by an increase in the number of advertisers and the rising average spend per advertiser.

Total operating expenses for the quarter rose 26 percent to 386.40 million yuan from 306.82 million yuan last year.

Looking ahead to the third quarter, Youku Tudou forecasts revenues of 1.09 billion yuan to 1.13 billion yuan, with advertising net revenues contributing between 965 million yuan and 1.01 billion yuan.

YOKU closed Tuesday's regular trading at $21.52, up $0.39 or 1.85 percent on a volume of 3.01 million shares. However, in after-hours, the stock declined $1.77 or 8.22 percent to $19.75.