YY Inc. (YY) Stock Slumping on Earnings Miss

NEW YORK (TheStreet) -- Shares of YY Inc. (YY), a China-based communication social platform, are falling by 7.50% to $63.80 in mid-morning trading on Tuesday, after the company released its 2015 first quarter earnings results, which fell short of analysts' expectations for the period.

YY said its adjusted earnings for the latest quarter came in at $41.6 million (RMB 258.8 million) or 70 cents per ADS, compared to the 75 cents per share analysts polled by Thomson Reuters had forecast.

The company said net revenue increased by 72.6% to $185.6 million (RMB 1,150.3 million). Analysts were looking for revenue of $174.4 million for the period.

"We continue to see strong top-line growth, driven primarily by an increase in paying users across different business segments... we expect profit margins to improve slightly going forward as we continue to enhance our operating efficiency. By recognizing and meeting the dynamic needs of our users, we can stay ahead of our competitors and further solidify our position as a leading real-time interactive social platform in China," company CFO Eric He said in a statement.

Separately, 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 robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

You can view the full analysis from the report here: YY Ratings Report

YY Chart YY data by YCharts

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