YY (YY) Stock Falls Despite Positive Quarter

NEW YORK (TheStreet) -- YY (YY) was falling -5.2% to $89.74 in after-hours trading Monday despite beating analysts' expectations for earnings and revenue in the first quarter.

The company reported earnings of 56 cents a share for the first quarter, beating the Capital IQ Consensus Estimate of 48 cents a share by 8 cents. Revenue grew 111.6% to $107.2 million, while analysts expected revenue of $95.3 million for the quarter.

"We are excited to have achieved robust performance and continued strong momentum heading into 2014, even during our seasonally slow first quarter," CEO David Xueling Li said in a press release. "Once again, online music and entertainment outperformed our expectations, with revenues growing by 228.0% and paying users increasing by over 103.2% year-over-year. In addition, we are very excited about the launch of our online education platform, 100 Education, in February followed by the introduction of the PC and mobile branded client last month."

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TheStreet Ratings team rates YY INC -ADR as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate YY INC -ADR (YY) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."

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