Rediff’s 18 Percent First-Quarter Revenue Increase Disappoints, ADS’ plunge

Rediff.com India Ltd.’s (Nasdaq: REDF) revenue edged up a lower-than-expected 18 percent in the first quarter, sending its American Depositary Shares down 13 percent on the Nasdaq. [via release]The online news and entertainment company posted revenues of US$6.8 million, which was below the US$9.1 million estimate of one analyst polled by Thomson Financial. Now, I know that it is not fair to compare the results to one analyst’s opinion but the share drop shows that investors gave the results a thumbs down.
The company reported earnings of US$2.12 million, or 7.26 cents per ADS, compared with US$1.98 million, or 6.82 cents per ADS, a year earlier. The disappointment over the results was reflected in the US$2.69 drop to US$17.39 in Thursday trading on the Nasdaq.
The company’s India online unit’s sales rose 14 percent to $4.62 million, while its U.S. publishing unit’s sales jumped 27 percent totaled $2.18 million. The number of registered users on the site grew 26 percent to 56.6 million during the quarter, the company said.
A recent story in Barron’s said Rediff.com

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