VisionChina (VISN) Cuts Q212 Sales, Net Income Outlook; Cites Weak Ad Environment
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VisionChina Media Inc. (Nasdaq: VISN) today announced that its results for the second quarter of 2012 are estimated to be lower than the previous guidance provided in its May 8, 2012 first quarter earnings release.
For the second quarter of 2012, the Company estimates its advertising service revenue to be between $28.0 million and $29.0 million, compared to the previous guidance of $40.0 million to $43.0 million.
The Street was looking for revs of $41.4 million.
The Company's non-GAAP financial measurement, net loss attributable to VisionChina Media shareholders excluding share-based compensation expenses, amortization of intangible assets, contingent loss in connection with litigation, and/or impairment loss and income tax credit in connection with the impairment loss for the second quarter of 2012, is estimated to be between $20.0 million and $22.0 million, compared to the previous guidance of $5.0 million to $8.0 million. The Company will also carry out an assessment to determine if there is any potential impairment loss against its goodwill and intangible assets.
The Company noted that its guidance is based on its current network that, as of the date of this press release, has already been secured by exclusive agency agreements or joint venture contract, as well as on management's current assessment of the possible outcome of pending litigation with the selling shareholders and former management of Digital Media Group Company Limited. If the number of cities in the Company's network expands or contracts, or if there is any progress in the pending litigation that affects management's assessment of the possible outcome, management's forecast could be affected.
Limin Li, VisionChina Media's chairman and chief executive officer, commented, "We are committed to providing as much transparency around our results as possible, and in as timely a manner as we can. Several factors led to this revised guidance, including further declining contribution from the internet-based businesses sector, a slower-than-expected recovery in advertising spending by small- and medium-sized clients in reaction to rate-card increases across our network in the fourth quarter of 2011, and the cautious sentiment of the current advertising market. While it is disappointing to issue lower guidance, we are striving to improve our sales execution by enhancing team organization, optimizing our incentive scheme, as well as recruiting experienced salespeople from the traditional TV sector to expand our customer verticals. Our underlying business development pipeline remains strong and we remain a leading outdoor media choice for advertisers. As our company gains additional attention and support from the central government, our proven media cost-control strategy will help us capitalize on opportunities for our company's long-term growth."
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For the second quarter of 2012, the Company estimates its advertising service revenue to be between $28.0 million and $29.0 million, compared to the previous guidance of $40.0 million to $43.0 million.
The Street was looking for revs of $41.4 million.
The Company's non-GAAP financial measurement, net loss attributable to VisionChina Media shareholders excluding share-based compensation expenses, amortization of intangible assets, contingent loss in connection with litigation, and/or impairment loss and income tax credit in connection with the impairment loss for the second quarter of 2012, is estimated to be between $20.0 million and $22.0 million, compared to the previous guidance of $5.0 million to $8.0 million. The Company will also carry out an assessment to determine if there is any potential impairment loss against its goodwill and intangible assets.
The Company noted that its guidance is based on its current network that, as of the date of this press release, has already been secured by exclusive agency agreements or joint venture contract, as well as on management's current assessment of the possible outcome of pending litigation with the selling shareholders and former management of Digital Media Group Company Limited. If the number of cities in the Company's network expands or contracts, or if there is any progress in the pending litigation that affects management's assessment of the possible outcome, management's forecast could be affected.
Limin Li, VisionChina Media's chairman and chief executive officer, commented, "We are committed to providing as much transparency around our results as possible, and in as timely a manner as we can. Several factors led to this revised guidance, including further declining contribution from the internet-based businesses sector, a slower-than-expected recovery in advertising spending by small- and medium-sized clients in reaction to rate-card increases across our network in the fourth quarter of 2011, and the cautious sentiment of the current advertising market. While it is disappointing to issue lower guidance, we are striving to improve our sales execution by enhancing team organization, optimizing our incentive scheme, as well as recruiting experienced salespeople from the traditional TV sector to expand our customer verticals. Our underlying business development pipeline remains strong and we remain a leading outdoor media choice for advertisers. As our company gains additional attention and support from the central government, our proven media cost-control strategy will help us capitalize on opportunities for our company's long-term growth."
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