YY Q4 Profit Surges - Update

(RTTNews) - Chinese social network operator YY Inc. (YY), Tuesday reported a surge in profit for the fourth quarter, driven largely revenues that more than doubled. Both earnings and revenues for the quarter came in ahead of Wall Street estimates.

YY's fourth-quarter profit rose to 192.0 million yuan or 3.21 yuan per ADS from 33.2 million yuan or 0.63 yuan per ADS last year. In U.S dollars, fourth-quarter profit was $31.7 million or $0.53 per share.

Adjusted earnings for the quarter were 3.63 yuan per ADS or $0.60 per ADS. On average, four analysts polled by Thomson Reuters expected earnings of $0.46 per ADS for the quarter.

YY, which operates video-based social entertainment website, said its revenues surged 129.5 percent to 612.3 million yuan from 266.8 million yuan last year. On U.S. dollar basis, revenues were $101.1 million, above analysts' consensus estimate of $84.48 million.

YY attributed the revenue growth to a 144.1 percent increase in revenues from internet value-added services, which consists of revenues from online music and entertainment as well as online games.

Chief Executive David Xueling Li said, "We're very pleased to end our first full fiscal year as a public company with a solid fourth quarter, building upon the strong momentum we saw throughout 2013. Online music and entertainment, in particular, again outperformed our expectations, with revenues growing by 217.1 percent year over year."

Gross margin in the fourth quarter improved to 51.5 percent from 47.9 percent last year.

Looking forward, the company expects first-quarter revenues of 625 million yuan to 635 million yuan. Analysts currently expect first-quarter revenues of $91.70 million.

YY closed Tuesday's trading at $87.18, up $11.29 or 14.88%, on the Nasdaq. The stock further gained $0.62 or 0.71%, in after-hours trade.