Rediff’s 18 Percent First-Quarter Revenue Increase Disappoints, ADS’ plunge
Rediff.com India Ltd.’s (Nasdaq: REDF) revenue edged up a lower-than-expected 18 percent in the first quarter, sending its American Depositary Shares down 13 percent on the Nasdaq. [via release]The online news and entertainment company posted revenues of US$6.8 million, which was below the US$9.1 million estimate of one analyst polled by Thomson Financial. Now, I know that it is not fair to compare the results to one analyst’s opinion but the share drop shows that investors gave the results a thumbs down.
The company reported earnings of US$2.12 million, or 7.26 cents per ADS, compared with US$1.98 million, or 6.82 cents per ADS, a year earlier. The disappointment over the results was reflected in the US$2.69 drop to US$17.39 in Thursday trading on the Nasdaq.
The company’s India online unit’s sales rose 14 percent to $4.62 million, while its U.S. publishing unit’s sales jumped 27 percent totaled $2.18 million. The number of registered users on the site grew 26 percent to 56.6 million during the quarter, the company said.
A recent story in Barron’s said Rediff.com
Very very poor results of Rediff…… Stock will go down to less than $10 quickly.
a) Other income – that includes interest income + sale of stake are MORE than net profit
b) Interest income continues to be the BIGGEST driver of net profit – more than 70% of net profit in fact
c) Ad sales has slowed down dramatically – JUST 5% year on year India ad sales increase ?
why is it so low, when people are coming on the internet big time
d) Are they losing out to Yahoo and Google in India big-time ?
e) Huge drop from $5 million to just $3 million quarter-on-quarter sales also
Overall looks like bad results – any insider info as to why things in Rediff.com are so bad ?
Hi..i think 5% growth Q on Q is good though not great…( ask the sales guys out there what it takes to get an online display ad compared to selling text based ads ) …..this only proves that online display ads requires some more time to mature …may be with new formats and technology. I feel this trend will be same for all portals ….or worst compared to rediff ( which has the max online advertising share)
This % growth trend will continue for next 2-3 quarters ..till innovations / VAS starts adding revenue to the overall portals base growth…..