Sina fourth quarter earnings net profit of $13 million 800 thousand fell 20.7%

Sina (Nasdaq:SINA) in the United States on February 22nd after the Nasdaq stock market closed on the fourth quarter ended December 31, 2005 and full year financial report.

2005 fourth quarter focus results

Net revenues of $52 million, representing a decrease of 9% over the same period last year, an increase of 5% over the previous quarter.

Advertising Revenue $25 million, representing an increase of 37% over the same period last year, an increase of 9% over the previous quarter.

Non advertising revenues $26 million 900 thousand, representing a decrease of 30% over the same period last year, an increase of 1% over the previous quarter.

U.S. GAAP net profit of $13 million 800 thousand, diluted net income per share of 24 cents.

Non GAAP net profit of $12 million 400 thousand, non GAAP diluted net income of $21 per share. Prior to the revised fourth quarter non GAAP net profit forecast of $12 million to $13 million.

2005 focus results

Net revenues of $193 million 600 thousand, compared with the previous year decreased by 3%.

Advertising Revenue $85 million, an increase of 30% over the previous year.

Non advertising revenues $108 million 600 thousand, compared with the previous year decreased by 19%.

U.S. GAAP net profit of $43 million 100 thousand, diluted net income per share of 75 cents.

Non GAAP net profit of $46 million 400 thousand, non GAAP diluted net income of $79 per share.

Wang Yan, chief executive of sina, said: "we are proud of our record revenue in the quarter. Despite the ongoing challenges of domestic mobile value-added services, we still achieved a satisfactory overall performance in 2005."

Enterprise performance

2005 fourth quarter, Sina's net revenues totaled $52 million, compared to $56 million 900 thousand in the same period last year, $49 million 600 thousand in the last quarter of $. 2005 full year net revenues of $193 million 600 thousand, $200 million in 2004.

2005 fourth quarter advertising revenue totaled $25 million, representing an increase of 37% over the same period in 2004, an increase of 9% over the previous quarter. 2005 fourth quarter advertising revenue accounted for the company's total revenue of 48%. 2005 full year advertising revenue totaled $85 million, compared with an increase of 30% in 2004.

2005 fourth quarter non advertising revenues totaled $26 million 900 thousand, representing a decrease of 30% over the same period in 2004, an increase of 1% over the previous quarter. 2005 fourth quarter mobile value-added services revenue totaled $24 million 800 thousand, representing a decrease of 31% over the same period in 2004, an increase of 3% over the previous quarter. SMS business is the main cause of mobile value-added services revenue decline compared with the same period last year. 2005 fourth quarter SMS revenue was $18 million 200 thousand, compared with the same period in 2004 fell by 37%. 2005 full year non advertising revenues totaled $108 million 600 thousand, compared with a decrease of 19% in 2004. 2005 full year mobile value-added services revenue totaled $98 million 100 thousand, compared with a decline of 21% in 2004, mainly from SMS and MMS business.

2005 fourth quarter gross margin from the same period in 2004 and the previous quarter of 68% fell to 66%. 2005 fourth quarter advertising gross margin was 69%, unchanged from the same period in 2004, the previous quarter was $68%. 2005 fourth quarter gross profit margin of mobile value-added services was 62%, compared to the same period in was the last quarter of the year was $66% in 2004. The main reason for the decline in gross profit margin of mobile value-added services is to increase the cost of data transmission to the mobile operators and increase the cost of content purchase. 2005 full year gross profit margin of 66% mobile value-added services, in 2004 was $69%.

2005 fourth quarter operating expenses totaled $23 million 300 thousand, representing an increase of 9% over the same period in 2004, compared with the previous quarter fell by 4%. 2005 annual operating expenses totaled $88 million 900 thousand, an increase of $29% compared to $69 million 100 thousand in 2004. The main reason for the increase in operating expenses compared with the previous year is the increase in the cost of mobile value-added services, as well as the cost of search, e-mail, instant messaging product development.

2005 fourth quarter net profit of $, compared to $17 million 400 thousand in the same period last year, $9 million 100 thousand in the last quarter of $13 million 800 thousand. Net profit in the fourth quarter of 2005, including a sale of the company's stake in the one shot network in the proceeds of $2 million 600 thousand, a pat Network is a joint venture between Sina and YAHOO online auction site. Diluted earnings per share for the fourth quarter of 2005 was $24, diluted net income per share for the same period in 2004 was $30, diluted earnings per share for the quarter was $16. Non GAAP net profit for the fourth quarter of 2005 totaled $12 million 400 thousand in the same period in 2004 and non GAAP net profit for the quarter was $18 million 400 thousand and $10 million. Fourth quarter non GAAP diluted net income of $21 per share for the same period in 2004 and non GAAP diluted earnings per share for the quarter were $31 cents and $17.

2005 full year net profit of $43 million 100 thousand, net income per diluted share of 75 cents in 2004 net profit of $66 million, net income per diluted share of $1.15. 2005 full year non GAAP net profit of $46 million 400 thousand, net income per diluted share of $79, non GAAP net profit of $71 million 600 thousand in 2004, net income per diluted share of $1.23.

As of December 31, 2005, Sina's cash, cash equivalents and securities investments totaled $300 million 700 thousand in the same period in 2004 and the end of the previous quarter were $275 million 600 thousand and $288 million 600 thousand. 2005 fourth quarter operating cash flow of $14 million 400 thousand. 2005 full year operating cash flow totaled $58 million 300 thousand.

Other matters

Due to the Shenzhen Network Technology Co., Ltd. to achieve a predetermined profit target of 2005, according to the terms of the acquisition of sina and the original acquisition of sina company, the company needs to pay compensation to the original shareholders. Sina has paid $15 million 400 thousand in December 31, 2005, and the sum of expenses included in goodwill.

Performance outlook

Sina expects the first quarter of 2006 total revenues will be between $44 million 500 thousand and $46 million 500 thousand, with advertising revenues to be between $21 million 500 thousand to $22 million 500 thousand, non advertising revenues to be between $23 million to $24 million. 2006 first