21Vianet Q2 Profit Down - Update

(RTTNews) - Chinese IT services provider 21Vianet Group Inc (VNET), Wednesday reported a wider loss for the second quarter despite a surge in revenues and stronger margins, as the bottom line was hurt by hefty debt extinguishment charge.

Beijing, China-based 21Vianet's second-quarter loss widened to 62.2 million yuan or 0.96 yuan per American depositary share from 42.6 million yuan or 0.72 yuan per ADS last year. On a US dollar basis, loss for the quarter was $10.0 million or $0.15 per ADS.

Excluding items, adjusted earnings for the quarter were 20.5 million yuan or 0.30 yuan per ADS compared with 18.5 million yuan or 0.30 yuan per ADS last year. On average, five analysts polled by Thomson Reuters expected earnings of 0.59 yuan per ADS for the quarter. Analysts' estimates typically exclude special items.

Adjusted profit for the quarter exclude, among other items, a one-time, non-cash loss on debt extinguishment of 41.6 million yuan or $6.7 million.

Revenues for the second quarter climbed 39.7 percent to 658.0 million yuan from 471.1 million yuan last year. On US dollar basis, revenues were $106.07 million. Analysts had a consensus revenue estimate of 644.46 million yuan for the quarter.

21Vianet Group provides carrier-neutral Internet data center services to Internet companies, government entities, blue-chip enterprises, and small- to mid-sized enterprises.

Gross margin for the quarter advanced to 27.4 percent from 26.1 percent last year, thanks mainly to increase in utilization rates and incremental revenue contributions from MS cloud services.

Total operating costs increased by 14.6 percent to 156.7 million yuan from last year.

Looking forward to the third quarter, the company expects revenue of 777 million yuan to 813 million yuan. Analysts currently estimate revenues of 722.06 million yuan.

For fiscal year 2014, the company now expects revenues of 2.94 billion to 3.02 billion yuan, compared to prior estimate of 2.71 billion to 2.85 billion yuan. Analysts currently estimate revenues of 2.83 billion yuan.

VNET closed Wednesday's trading at $28.31, down $1.75 or 5.82%, on the Nasdaq. The stock further gained $0.94 or 3.32% in the after-hours trade.