Renren Loss Narrows, Stock Down On Weak Q3 Revenue Outlook

(RTTNews) - Chinese online social networking site Renren Inc. (RENN), Wednesday reported a loss for the second quarter that narrowed from a year ago, as revenues increased. The company's shares plunged 11 percent in extended trade after having forecast third-quarter revenue below current Wall Street estimates.

Beijing, China-based Renren's second-quarter loss narrowed to $9.3 million or $0.03 per ADS from $24.9 million or $0.06 per ADS last year. Adjusted loss was $3.83 million, compared to a loss of $21.80 million last year.

On average, five analysts polled by Thomson Reuters expected a loss of $0.07 per share for the quarter. Analysts' estimates typically exclude special items.

Renren's total revenues for the second quarter grew 10.7 percent to $49.62 million from $44.82 million last year. Analysts expected revenues of $55.08 million for the quarter. Analysts' estimates typically exclude special items.

"Revenue growth slowed down primarily due to delays in our game pipeline. Although we face short-term monetization challenges, we are on track in executing our strategic priorities for the year aimed at securing our position in the highly competitive mobile internet sector in China," said Joseph Chen, Chairman and Chief Executive Officer.

Online game revenues rose 1.4 percent to $22.8 million, while other IVAS revenues jumped 43.5 percent to $5.2 million. Online advertising revenues inched 2.4 percent to $15.4 million from last year.

The number of activated users on Renren.com increased to about 194 million from about 162 million last year. Monthly unique log-in users increased to 54 million from around 45 million.

Operating expenses increased 32.6 percent to $66.4 million, as selling and marketing expenses rose 40 percent, research and development expenses were up 24.6 and general and administrative expenses rose 31 percent.

Looking forward to the third quarter, the company expects to generate revenues of $47 million to $49 million, representing 3 to 7 percent year-over-year decline. Analysts currently expect revenues of US$64.55 million for the third quarter.

RENN closed Wednesday at $4.20, down $0.38 or 8.30%, on the Nasdaq. The stock further dropped $0.41 or 9.76% in after hours.