Stock Earnings Analysis: Renren Inc. (NYSE:RENN)

Renren Inc. (NYSE:RENN) reported earnings for the three months ended March 2016 on June 08, 2016. The company earned $0.13 per share on revenue of $21.63M. Analysts had been modeling earning per share of $-0.06 with $22.76M in revenue.

Renren Inc. (NYSE:RENN) announced its unaudited financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Highlights

  • Total net revenues were US$10.8 million, a 29.2% increase from the corresponding period in 2015.
  • Advertising and IVAS net revenueswere US$6.1 million, a 24.8% decrease from the corresponding period in 2015.
  • Financing income wasUS$4.7 million, compared to US$0.2 million in the corresponding period of 2015.
  • Gross profit was US$2.4 million.
  • Operating loss was US$19.2 million, compared to an operating loss of US$27.8 million in the corresponding period in 2015.
  • Net loss attributable to the Company was US$23.2 million, compared to a net loss of US$23.8 million in the corresponding period in 2015.
  • Adjusted net loss(non-GAAP) was US$15.9 million, compared to an adjusted net loss of US$17.6 million in the corresponding period in 2015.

Financing income was US$4.7 million for the first quarter of 2016, compared to US$0.2 million in the corresponding period of 2015. The increase was in line with the increase of financing receivable from US$12.7 million as of March 31, 2015 to US$170.6 million as of March 31, 2016.

Cost of revenues was US$8.4 million, a 7.7% increase from the corresponding period of 2015.

Operating expenses were US$21.5 million, a 23.9% decrease from the corresponding period of 2015.

Selling and marketing expenses were US$4.6 million, a 39.1% decrease from the corresponding period of 2015. The decrease was primarily due to a decrease in advertising expenses, headcount reductions, and a decrease in personnel related expense.

Research and development expenses were US$5.3 million, a 39.0% decrease from the corresponding period in 2015. The decrease was primarily due to headcount reductions and a decrease in personnel related expense.

General and administrative expenses were US$11.6 million, a 3.2% decrease from the corresponding period in 2015.

Share-based compensation expenses, which were all included in operating expenses, were US$7.2 million, compared to US$6.2 million in the corresponding period in 2015.

Operating loss was US$19.2 million, compared to an operating loss of US$27.8 million in the corresponding period in 2015.

Realized loss on short-term investments was US$0.1 million, compared to a gain of US$1.1 million in the corresponding period in 2015.

Loss in equity method investments was US$11.9 million, compared to earnings of US$0.5 million in the corresponding period in 2015.

Net loss attributable to the Company was US$23.2 million, compared to a net loss of US$23.8 million in the corresponding period in 2015.

Renren Inc. earnings per share showed a decreasing trend of -869.4% for the current fiscal year. The company’s expected EPS decline rate for next fiscal year is -24%.Analysts project EPS decline over the next 5 years at 0%. It has EPS annual decline over the past 5 fiscal years of -28.2% when sales declined -11.7. It reported -12% sales drop, and -869.4% EPS decline in the last quarter.

The stock is trading at $1.95, up 9.55% from 52-week low of $1.78. The stock trades down -50.13% from its peak of $3.85 and % below the consensus price target of $1.9. Its volume clocked up at 0.68 million shares which is higher than the average volume of 0.61 million shares. Its market capitalization currently stands at $659.85M.

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