Cheetah Mobile beats Q1 revenue estimates but misses on earnings

Cheetah Mobile Inc. (NYSE: CMCM) reported better-than-expected revenues for the first quarter of 2019 but earnings fell short of estimates. The consensus estimate was for EPS of $0.06 on revenue of $155 million. Shares were up 0.25% in premarket hours on Friday.  

Total revenues were RMB1,085.6 million ($161.8 million), at the high end of the company’s guidance range of RMB1,060 million to RMB1,090 million. This compares to revenues of RMB1,145 million in the year-ago quarter.

Net income attributable to Cheetah Mobile shareholders was RMB7.1 million ($1.1 million) compared to RMB69.9 million last year. Adjusted net income was RMB33.8 million ($5 million).

Net loss per ADS was RMB0.02 ($0.00) compared to a net income per ADS of RMB0.42 last year. Adjusted net income per ADS was RMB0.17 ($0.03).  

The average number of global mobile monthly active users (Mobile MAUs) was 434.8 million. The number of Mobile MAUs from markets outside of China, or overseas markets, accounted for 70.3% of the total number of Mobile MAUs during the quarter.

In the first quarter, revenues from utility products and related services fell 33.1% year-over-year to RMB497.9 million ($74.2 million), mainly due to disruptions to the overseas mobile utility business caused by negative publicity from a news article published last year.

In the mobile entertainment business, revenues grew 41.7% year-over-year to RMB556.2 million ($82.9 million), driven by growth in both the mobile games and LiveMe businesses. Mobile entertainment revenues made up 51.2% of total revenue in the quarter, up from 34.3% in the year-ago period.

Revenues from mobile games increased by 72.5% year-over-year to RMB301.5 million ($44.9 million), mainly due to the strong performance of Bricks n Balls. Revenues from LiveMe rose 17% year-over-year to RMB254.8 million ($38 million), driven by higher average revenue per paying user.

Other revenues grew by 299.2% year-over-year to RMB31.5 million ($4.7 million), mainly driven by the sales of the AI-based interpretation device, Cheetah Translator, in China.

For the second quarter of 2019, revenue is expected to be between RMB920 million ($137 million) and RMB950 million ($142 million).

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