Why Dangdang (DANG) Is Exploding on Thursday

NEW YORK (TheStreet) -- E-Commerce China Dangdang (DANG) is spiking on Thursday after reporting better-than-expected quarterly sales and earnings.

By early afternoon, shares had popped 25.1% to $12.48.

In the three months to December, the Beijing-based business reported net income of 4 cents a share. Analysts surveyed by Thomson Reuters had forecast a net loss of 7 cents a share.

"Dangdang returned to profitability in the fourth quarter of 2013. This reflects our commitment to improve our financial performance and solid execution of our strategies to transform Dangdang from an online bookstore into an integrated online shopping mall targeting mid-to high-end consumers," said executive chairwoman Peggy Yu Yu in a statement.

Revenue of $325.7 million was 25.7% higher than a year earlier and beat consensus by $9.9 million. Active customers rose 18% year over year to 8.9 million.

For the first quarter ending March, the company expects revenue of around $282.8 million, well over analyst expectations for $255.88 million.

Also See: Baidu Surge After Q4 Earnings

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TheStreet Ratings team rates E-COMMERCE CH DANGDANG -ADR as a Sell with a ratings score of D. The team has this to say about their recommendation:

"We rate E-COMMERCE CH DANGDANG -ADR (DANG) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been poor profit margins."

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