NQ Mobile Inc reported losses for the third quarter and announced changes to its board of directors today.
Despite its quarterly losses, the shares of the Chinese mobile internet service provider climbed more than 13% to $5.72 per share during the extended-hours trading, around 5:34 P.M. in New York, but skeptics likely have not changed their views.
NQ Mobile 3Q financial results
NQ Mobile Inc (NYSE:NQ) posted a net loss of $17 million or $0.04 per American Depository Shares (ADS) for the third-quarter compared with compared its net losses of $2.4 million or one penny per ADS in the year-ago quarter.
During the quarter the company said its net revenues were $81.2 million, an increase of 49.8% from $54.2 million last year.
NQ Mobile Inc said its mobile value added service revenues fell 6.7% to $25.1 million due to the decline of its consumer mobile security revenues. The company said its revenues in mobile games climbed due to the rapid growth of FL Mobile game platform and the launching of new games during the period.
Its advertising revenue went up 84.5% to $20.4 million driven by increased monetization and successful third-party application referrals from its acquisitions of WAPS and Fanyue—its online and offline ad networks.
NQ Mobile Inc said its revenues from enterprise mobility rose 125.5% to $34.6 million. The company benefited from the rapid growth of the business after entering a premium distributor agreement with Apple Inc and acquiring Trustek.
Its other revenues generated from providing technical contract services to third parties jumped 17.8% to $1.1 million in the third quarter.
NQ Mobile suffered a 30.2% decline in gross profit to $22.5 million. Its gross margin dropped from 59.5% last year to 27.8%.
Board changes
The board of directors of the company announced that Mr. James Ding and Mr. Xiuming Tao resigned from their positions due to personal reasons. The board appointed Mr. Roland Wu as new independent director effective immediately.
Mr. Wu previously served as executive director of China Tycoon Beverage Holdings Limited and Bestway International Holdings Limited. The leadership of NQ Mobile believed that he has an extensive experience and in-depth knowledge about the capital markets.
In addition, the company named Mr. Justin Chen as chairman of the corporate governance and nominating committee of the board.The company recently announced the departure of its co-CEO Henry Lin. NQ Mobile Inc currently has total of nine directors.
NQ business outlook
NQ Mobile Inc estimated that it will be able to achieve revenues in the range of $82 million to $83 million in the fourth quarter. Its full year revenue is expected to be around $325 million to $326 million, up from its previous estimate of around $320 million to $325 million.
