Phoenix reports its revenue in line with the prior announced guidance as the stock soars on special dividend announcement.
The Chinese media company, Phoenix New Media Ltd. (FENG) is soaring with heavy volume today. The stock spiked after the company reported its third quarter results and released a special cash dividend of $0.1714 per ordinary share or $1.3712 per American depositary share (ADS).
Shares made a strong in premarket surging above 60% before the stock kicked off the session at $2.45 up from the prior close of $1.54. FENG is trading with a high volume of 30 million compared to the average volume of 181K.
As we write this at 12:47 A.M. EDT, FENG was trading at $2.31 surging by 50%. While, the 52-week ranges between $1.15-$3.49.
The company just announced its third-quarter 2020 results. The CEO of Phoenix, Shuang Liu highlighted that the company obtained total revenue in line with its prior guidance, recording RMB303 million or $46.02 million. It was a 10% decrease from RMB339.9 or $52 million in the prior year period. The decrease in revenue was affected by the pandemic impact.
Phoenix made various improvements, especially its flagship news app, ifeng. The company improved ifeng’s user experience and enhanced its content delivery efficiencies via optimizing the basics of the app. During the quarter, Phoenix provided ifeng’s users an additional flash short-form content.
“We remain steadfast in our commitment to providing a superior user experience, upgrading our products, maintaining our content leadership, augmenting our monetization capabilities and setting the stage for a return to growth,” noted Shuang during the earnings release call.
However, the company reported a net loss of $140,000 in Q3 2020 from profit in the same period last year.
Despite that the financial results seem to be on the lower side, the company improved its businesssubstantially in Q3. The per user average spending time on Phoenix’s platform increased by 20 Year-over-Year (YoY). The users’retention rate surged by 41% YoY. While, the number of new users soared by 30% from last year’s quarter.
The company is focusing on its user growth and adopt a thrifty approach towards user acquisition strategies, pushing its acquisition channels with quality ROI.
In addition, the special cash dividends will be payable to ordinary shares holders on Dec. 22, 2020. The dividends released are approximately valued at $100 million, $1.3712 per ADS.
Moreover, the Board also declared a special cash compensation for Phoenix’s option holders, totaling almost $8.98 million. JPMorgan Chase Bank, N.A. will be paying the dividends at the close of business on Dec. 22.
Presenting the outlook for the current quarter, Phoenix New Media Ltd. (FENG) expects its revenues between RMB332.4 million and RMB362.4 million, almost 17% to 9.5% lower compared to last year.