Linktone Q1 2010 Profit Down 71% YoY
Linktone PR, 5/21/10
Chinese wireless value-added service provider Linktone (Nasdaq: LTON) has announced its unaudited financial results for the first quarter ended March 31, 2010, with net revenues up 28.6% YoY to reach USD 18.4 mln. Gross revenues were down 28.3% to USD 18.95 mln.
Net income for the quarter was USD 101,011, down 70.8% YoY.
Data-related services revenue was USD 7.8 mln, representing 42% of gross revenues, compared with USD 9.5 mln or 62% of gross revenues for the fourth quarter of 2009. The sequential decrease was primarily due to the telecommunication operators' new policy requiring additional notices and confirmations to end users during the purchase of embedded services in mobile handsets, effective from January 2010. Short Messaging Services revenue represented 38% of gross revenues, compared with 58% for the fourth quarter of 2009. SMS revenue was USD 7.2 mln for the first quarter of 2010, compared with USD 8.9 mln for the fourth quarter of 2009. Multimedia Messaging Services revenue represented 1% of gross revenues, compared with 1% for the fourth quarter of 2009. MMS revenue was USD 0.1 mln for the first quarter of 2010, compared with USD 0.2 mln for the fourth quarter of 2009. Wireless Application Protocol and Java Gaming revenue represented 3% of gross revenues compared with 3% for the fourth quarter of 2009. WAP and Java revenue was USD 0.5 mln for the first quarter of 2010, compared with USD 0.4 mln for the fourth quarter of 2009.
Audio-related services accounted for 56% of gross revenues, or USD 10.8 mln, compared with 37% of gross revenues, or USD 5.7 mln, for the fourth quarter of 2009. The sequential increase was primarily due to a new cooperative content agreement secured in December 2009 which helped increase IVR revenue significantly in January and February. IVR revenue increased to 49% of gross revenues, compared with 27% for the fourth quarter of 2009. IVR revenue was USD 9.4 mln for the first quarter of 2010, compared with USD 4.2 mln for the fourth quarter of 2009. However, Linktone does not expect the high volume of IVR sales to continue into the second quarter of 2010 because one of the telecommunication operators issued a new management policy, effective from March 2010, regarding certain IVR services which are expected to adversely affect the profitability of such services. Color Ring-Back Tones ("CRBT") revenue decreased to 7% of gross revenues, compared with 10% for the fourth quarter of 2009. CRBT revenue was USD 1.4 mln for the first quarter of 2010, compared with USD 1.5 mln for the fourth quarter of 2009.
In April 2010, Linktone acquired a 30% ownership stake in Allied Pacific Sports Network Limited (APSN), an Internet and wireless provider of on-demand sports throughout Asia and the operator of a number of officially licensed sports-focused websites, and a 45% interest in ASPN's indirect subsidiary, Allied Pacific Baseball Network Limited. Simultaneously with Linktone's investment, APSN entered into a multi-year agreement with MLB Advanced Media, L.P. ("MLBAM") to become the exclusive provider of Major League Baseball ("MLB") content in China, Hong Kong, Macau, South Korea, Singapore, Thailand, Indonesia, the Philippines, and Vietnam for the Internet, interactive media, mobile telephones, and other wireless devices. At the same time, Linktone terminated its previously announced license arrangement with MLBAM.
For the second quarter ending June 30, 2010, Linktone anticipates gross revenues to be in the range of USD 13 mln to USD 14 mln due to the continuing impact of the operators' policy on embedding channel and IVR services.
To view Linktone's full earnings report, please click here.
Keywords: regulation guidance Allied Pacific Sports M&A profit revenue sports wireless Linktone LTON Q1 2010 SP WVAS fiscal report
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