What happened
Chinese microblogging service Weibo (WB +0.52%) reported strong fourth-quarter results early Thursday morning, driving the stock as much as 10% higher. Weibo's shares had retreated to a 7.7% gain by 2 p.m. EDT.
So what
Weibo's fourth-quarter sales rose 9.7% year over year, landing at $513 million. Adjusted earnings increased by 20% to $0.92 per diluted share. Your average analyst would have settled for earnings of roughly $0.74 per share on revenue near $499 million. Looking ahead, Weibo's management expects first-quarter sales to grow approximately 28%, which works out to $412 million. Here, the analyst consensus stopped at $399 million.
Image source: Getty Images.
Now what
The company posted modest year-over-year user growth and wider profit margins. Management would have preferred the opposite situation, as Weibo's business model is tuned to maximize top-line growth and user additions at the expense of limited bottom-line profits, but exorbitant profits is one of the nicer problems a business can have.
Weibo took this opportunity to promote finance VP Fei Cao to CFO. Furthermore, Wei Wang was installed as chief operating officer, a newly created position in Weibo's management structure. Both Cao and Wang originally joined Weibo from senior leadership positions in parent company SINA. The market calmly accepted these corner-office appointments.
It's no surprise to see investors embracing Weibo's earnings beat and bullish guidance. The stock has now gained 48% in 52 weeks.
