Ads Marketplace 58.com Sees 12% Dive on Wall Street After Earnings
The stock of 58.com Inc. (NYSE: WUBA) plunged 12 percent in early trading Friday to $64.21 per American depositary share after it reported lower-than-expected income for the fourth quarter.
In a statement after markets closed Thursday, China's largest online marketplace for classifieds said its revenue in the three months through December reached $525.9 million, up 31 percent from the same period of 2017.
The platform's net income for the quarter was $59.9 million, or 40 cents per share, and that 1 percent year-over-year decline and a miss on analysts' estimates disappointed shareholders.
For the full year, 58.com reported $1.9 billion in revenue, an increase of 31 percent from 2017, and net income of $291 million, up 55 percent.
"Throughout 2018, our portfolio of apps including mainly 58.com, Anjuke, and Zhuan Zhuan generated strong growth and now cover over 500 million users as traffic continues to grow in a healthy and sustainable manner," the chairman and chief executive officer of 58.com, Michael Yao, said in the statement.
He continued, "Our core housing and jobs businesses continue to lead the market while newer businesses like Zhuan Zhuan and 58 Town have expanded our addressable market, particularly in lower tier cities. While these newer businesses generated larger losses when compared with a year ago, our operating profit continued its rapid growth and operating margins for fiscal year 2018 were roughly the same when compared to last year due to improved operational efficiency in our core business."
The company said costs of revenue in the fourth quarter were $66.7 million, up 74 percent year-over-year. Operating expenses were $356.3 million, a 30 percent increase from the final quarter of 2017.
58.com forecast revenue in the range of 2.9 billion yuan and 3 billion yuan for the first quarter of 2019, representing an increase of between 16 and 20 percent year-over-year.