SAN FRANCISCO (Reuters) - Chinese Internet company Sina Corp reported a 12 percent increase in advertising revenue in the second quarter and grew its profit due to a gain from an equity investment.
Shares of Sina were up 4.5 percent at $53.20 after hours on Wednesday.
Sina, which makes most of its revenue from online advertising, has faced stiff headwinds this year as corporations slashed advertising amid a weakening economic outlook.
"The environment is still challenging," said ThinkEquity analyst Henry Guo. But he said that Sina's results show that advertisers view its website as "must-buy inventory."
Sina said that adjusted net revenue in the third quarter would range between $145 million and $148 million, with advertising revenues forecast to increase between 19 percent and 21 percent year-on-year.
The company provided no details about its recently launched efforts to monetize its popular Weibo microblogging service.
"The key is going to be how much they're assuming for Weibo in the guidance," said Roth Capital Partners analyst Adam Krejcik, who said he hoped to get more details on the conference call with Sina executives slated for later on Wednesday.
Sina started monetizing Weibo this year by offering special services to business accounts and selling VIP memberships to regular users. In May, Sina executives warned of further losses this year as the firm continues to invest in Weibo, China's most popular microblog.
Net income attributable to Sina during the second quarter was $33.2 million, or 49 cents a share, compared to $10 million, or 15 cents a share in the year ago period.
During the quarter Sina recognized a $32.8 million gain related to the merger of a real estate company in which Sina owns a 34.4 percent stake.
Excluding certain items, Sina said it earned $3.7 million, or 5 cents a share. Analysts polled by Thomson Reuters I/B/E/S expected Sina to post a one cent loss on an adjusted basis.
Sina's net revenue in the three months ended June 30 totaled $131.6 million, up from $118.96 million in the year-ago period.
Sina's advertising revenue increased 12 percent year-on-year to $103.1 million, while non-advertising revenue increased 5 percent to $28.5 million.
Reporting By Alexei Oreskovic in San Francisco and Melanie Lee in Shanghai; Editing by Phil Berlowitz