) -- Chinese digital media group
Focus Media Holding
swung to a profit during the third quarter, driven by a significant drop in expenses and higher revenue.
For the quarter ended September 30, the company saw earnings of $112.7 million, or 76 cents per diluted share, compared with a loss of $127.6 million, or 99 cents per diluted share, in the same period a year ago. Earnings were well ahead of analyst estimates of 33 cents a share.
Total operating expenses were down 32.6% to $46.7 million from $69.3 million.
Revenue rose 39.8% to $137.4 million from $98.3 million during the quarter as the company saw strong gains in its LCD display network revenue.
"In the third quarter of 2010, we managed to achieve record high combined LCD display network and in-store network revenue," chairman and CEO Jason Jiang said, "exceeding the last best performing quarter in the history of the company, the third quarter of 2008."
LCD display network revenue, including the movie theater network, was up 48% to $82.9 million from $56 million as the total number of installed base of LCD displays in the company's network nationwide was 149,913, compared with 142,305 as of June 30, 2010.
"In the third quarter of 2010, the Company achieved aggregate net revenue year on year growth in our LCD display, in-store and poster frame business of 45%, and quarter on quarter growth of 14%," CFO Kit Low said.
In-store net revenue rose 23% to $9.4 million from $7.6 million while net revenue from its poster frame segment increased 45.6% $32.2 million from $22.1 million. The total number of frames available for sale in its network was 276,504 in the third quarter, up from 238,689 as of June 30, 2010.
Its traditional outdoor billboard segment saw a 6.4% drop in revenue to $8.9 million from $9.6 million.
For the nine months ended September 30, the company saw earnings of $137.1 million, or 93 cents a share, compared with a loss of $156.3 million, or $1.21 a share, in the same period a year ago.
The company cut its operating costs by 26.6% to $134.7 million from $183.4 million and revenue rose 24.6% to $356.6 million from $286.3 million.
Revenue at its LCD display segment was up 45.6% to 241.4 million from $165.8 million, while its billboard revenue fell 42.3% to 28.5 million from $40.6 million.
Management expects net revenues for its core business to be in the range of $130 to $132 million in the fourth quarter. This would represent a 2% quarterly growth and a 30% yearly growth.
-- Written by Theresa McCabe in Boston.
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