Earning News Spotlight – Cheetah Mobile Inc. (NYSE:CMCM)

Cheetah Mobile Inc. (NYSE:CMCM) closed with change of 3.74% to $12.2 with the total traded volume of 2226327 shares versus to an average volume of 1.45M. The stock was up in the 5 days activity -18.29%. The one month performance of stock was low -14.92%. CMCM shares are above 9.12% for the quarter and driving a -6.66% over the course of the past year and is now up 0.99% since this point in 2018.  Right now CMCM beta is 3.49. The average volatility for the week and month was at 9.28% and 5.81% respectively.

Cheetah Mobile Inc. (NYSE:CMCM), a leading mobile internet company with strong global vision, today reported its unaudited consolidated financial results for the fourth quarter and fiscal year ended December 31, 2017.

Fourth Quarter 2017 Consolidated Financial Results

REVENUES

Total revenues increased by 8.9% year over year and 16.2% quarter over quarter to RMB1,387.8 million (US$213.3 million) in the fourth quarter of 2017.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues decreased by 0.6% year over year but increased by 15.4% quarter over quarter to RMB461.4 million (US$70.9 million) in the fourth quarter of 2017. The quarter-over-quarter increase was a result of one-time higher channel costs associated with our mobile game business in China, and higher revenue sharing fees with online broadcasters associated with the Live.me business. Non-GAAP cost of revenues decreased by 0.2% year over year but increased by 15.7% quarter over quarter to RMB462.4 million (US$71.1 million) in the fourth quarter of 2017.

Gross profit increased by 14.3% year over year and 16.5% quarter over quarter to RMB926.4 million (US$142.4 million) in the fourth quarter of 2017. Non-GAAP gross profit increased by 14.1% year over year and 16.4% quarter over quarter to RMB925.4 million (US$142.2 million) in the fourth quarter of 2017.

OPERATING INCOME AND EXPENSES

Total operating expenses decreased by 5.9% year over year but increased by 6.3% quarter over quarter to RMB704.4 million (US$108.3 million) in the fourth quarter of 2017. Total non-GAAP operating expenses increased by 0.7% year over year and 9.2% quarter over quarter to RMB700.1 million (US$107.6 million) in the fourth quarter of 2017.

Operating profit increased to RMB222.0 million (US$34.1 million) from RMB62.2 million in the same period last year and RMB132.3 million in the previous quarter. Non-GAAP operating profit increased by 93.7% year over year and 46.6% quarter over quarter to RMB225.4 million (US$34.6 million) in the fourth quarter of 2017.

Share-based compensation expenses decreased by 93.8% year over year and 84.2% quarter over quarter to RMB3.4 million (US$0.5 million) in the fourth quarter of 2017. The decrease resulted from a combination of several factors. The Company employed an accelerated method to recognize share-based compensation expenses. A significant number of share-based awards that were granted by the Company during its IPO in 2014 approached the end of their vesting periods in 2017. Furthermore, fewer share-based awards were granted in 2017 than in previous years and more unvested awarded shares were forfeited in 2017.

IMPAIRMENT OF INVESTMENTS

Impairment of investments were RMB209.6 million (US$32.2 million) in the fourth quarter of 2017 primarily due to a one-time non-cash write-down of some investment assets, which the Company considered other-than-temporary, to its fair value. This write-down was the result of lower-than-expected performance and financial position of the investment assets.

OTHER INCOME, NET

Other income, net, was RMB1,089.0 million (US$167.4 million) in the fourth quarter of 2017, mainly resulting from the disposals of the Company’s interests in Musical.ly and the Company’s News Republic business.

NET INCOME ATTRIBUTABLE TO CHEETAH MOBILE SHAREHOLDERS

Net income attributable to Cheetah Mobile shareholders increased to RMB1,047.1 million (US$160.9 million) in the fourth quarter of 2017 from RMB58.8 million in the same period last year and RMB139.7 million in the third quarter of 2017. Non-GAAP net income attributable to Cheetah Mobile shareholders increased to RMB1,050.5 million (US$161.5 million) in the fourth quarter of 2017 from RMB113.0 million in the same period last year and RMB161.1 million in the third quarter of 2017.

NET INCOME PER ADS

Diluted income per ADS increased to RMB7.27 (US$1.12) in the fourth quarter of 2017 from RMB0.41 in the same period last year and RMB0.95 in the third quarter of 2017. Non-GAAP diluted income per ADS increased to RMB7.29 (US$1.12) in the fourth quarter of 2017 from RMB0.80 in the same period last year and RMB1.10 in the third quarter of 2017.

ADJUSTED EBITDA

Adjusted EBITDA (Non-GAAP) increased by 61.3% year over year and 36.8% quarter over quarter to RMB255.8 million (US$39.3 million) in the fourth quarter of 2017.

CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS BALANCE

As of December 31, 2017, the Company had cash and cash equivalents, restricted cash, and short-term investments of RMB3,803.3 million (US$584.6 million).

CASH FLOW FROM OPERATING ACTIVITIES AND FREE CASH FLOW

In the fourth quarter of 2017, the Company generated RMB267.5 million (US$41.1 million) of net cash from operating activities and RMB258.9 million (US$39.8 million) of free cash flow.

SHARES ISSUED AND OUTSTANDING

As of December 31, 2017, the Company had a total of 1,421,649,639 Class A and Class B ordinary shares issued and outstanding. One ADS represents 10 Class A ordinary shares.

Fiscal Year 2017 Results

REVENUES

Total revenues increased by 9.0% year over year to RMB4,974.8 million (US$764.6 million) in 2017, which was primarily driven by rapid growth in the Company’s Live.me and mobile game businesses.

Cost of revenues increased by 15.3% year over year to RMB1,780.1 million (US$273.6 million) in 2017, which primarily resulted from increased investment in the Company’s Live.me business. Non-GAAP cost of revenues increased by 15.4% year over year to RMB1,779.3 million (US$273.5 million) in 2017.

Gross profit increased by 5.8% year over year to RMB3,194.7 million (US$491.0 million) in 2017. Non-GAAP gross profit increased by 5.7% year over year to RMB3,195.4 million (US$491.1 million) in 2017.

OPERATING INCOME/LOSS AND EXPENSES

Total operating expenses decreased by 9.4% year over year to RMB2,747.8 million (US$422.3 million) in 2017. Total non-GAAP operating expenses decreased by 2.0% year over year to RMB2,675.2 million (US$411.2 million).

Operating profit was RMB446.9 million (US$68.7 million) in 2017 as compared to an operating loss of RMB12.4 million in 2016. Non-GAAP operating profit increased by 77.1% year over year to RMB520.2 million (US$80.0 million) in 2017.

Share-based compensation expenses decreased by 76.1% year over year to RMB73.3 million (US$11.3 million) in 2017. The decrease resulted from a combination of several factors. The Company employed an accelerated method to recognize share-based compensation expenses. A significant number of share-based awards that were granted by the Company during its IPO in 2014 approached the end of their vesting periods in 2017. Furthermore, fewer share-based awards were granted in 2017 than in previous years and more unvested awarded shares were forfeited in 2017.

NET INCOME/LOSS ATTRIBUTABLE TO CHEETAH MOBILE SHAREHOLDERS

Net income attributable to Cheetah Mobile shareholders was RMB1,348.2 million (US$207.2 million) in 2017 as compared to a net loss attributable to Cheetah Mobile shareholders of RMB80.5 million in 2016. Non-GAAP net income attributable to Cheetah Mobile shareholders increased by 530.0% year over year to RMB1,421.5 million (US$218.5 million) in 2017.

NET INCOME/LOSS PER ADS

Diluted income per ADS in 2017 was RMB9.37 (US$1.44) as compared to diluted loss per ADS of RMB0.58 in 2016. Non-GAAP diluted income per ADS in 2017 was RMB9.88 (US$1.52) as compared to RMB1.59 in 2016.

ADJUSTED EBITDA

Adjusted EBITDA (Non-GAAP) increased by 43.6% year over year to RMB656.5 million (US$100.9 million) in 2017.

Business Outlook

For the first quarter of 2018, the Company expects its total revenues to be between RMB1,100 million (US$169 million) and RMB1,140 million (US$175 million). This estimate represents management’s preliminary view as of the date of this release, which is subject to change.

Past Trading Snap:

Shares of Cheetah Mobile Inc. have been recently spotted trading -32.89% off of the 52-week high price. On the other end, company shares have been noted 61.80% away from the low price over the last 52-weeks. 52 week range of the stock remained $ 7.54 – 18.18. Switching over to some distances from popular moving averages, we see that the stock has been recorded -15.87% away from the 50 day moving average and 6.87% away from the 200 day moving average. Moving closer, we can see that shares have been trading -13.82% off of the 20-day moving average.

Peter Hamm

Peter Hamm is an author, journalist and CEO of the website. He has more than 5 years of experience in institutional investment markets, including fixed income, equities, derivatives and real estate. He has a Bachelor in Business Administration with a major in Finance. He bought his first stocks in a private business at age 15 and made his first public stock trade at 23. He has always been interested in the stock market and how it behaves. As the dad of two children, he’s made saving money and investing for them a high priority. Over many years of investing, he has made some wise choices and he’s made many mistakes. But he’s learned from both. Mr. Peter observations and experience give him the insight to stock market patterns and the investor behaviors that create them. He reports about Earnings news category. Address: 3876 Levy Court, EASTON, Pennsylvania Email: Peter@newscontrol.info

Leave a Reply

Your email address will not be published. Required fields are marked *