Boston, MA 05/27/2014 (wallstreetpr) – One of the biggest neutral internet data center service provider in China, 21Vianet Group Inc (NASDAQ:VNET) announced a loss for the first quarter hurt by stock-based compensation charges and amortization expenses. However, on an adjusted basis, profit advanced year-over-year but fell short of the Wall Street analysts’ expectations.
Q1 Results
21Vianet Group Inc (NASDAQ:VNET) suffered a net loss of RMB151.4 million compared to a profit of RMB12.0 million in the year earlier quarter. In terms of USD, the loss was $24.4 million or a loss of 37 cents a share for the first quarter of the current year. On an adjusted basis, profit rose 6.1% to RMB33.0 million from RMB31.1 million in the year-ago quarter. In terms of USD, the adjusted profit for the first was $5.3 million or 8 cents a share. On average, analysts expected the company to report earnings of US$0.10 a share.
Net revenues grew 34.5% to RMB586.0 million from RMB435.7 million. In USD terms, 21Vianet Group generated revenue of $65.1 million. The company attributed the growth in revenue to a higher number of cabinets under management, increased demand for its CDN services besides higher contributions from cloud services. Hosting and related services’ revenue jumped 52.8% to RMB404.4 million from RMB264.7 million in the year-ago quarter.
The company’s adjusted gross margin improved to 29.2% from 28.8% in the previous year quarter and 29.0% in the preceding quarter as a result of increased utilization rates coupled with incremental contributions from cloud services.
21Vianet Group said its total operating costs surged to RMB280.9 million from RMB89.2 million.
Outlook
Moving ahead, 21Vianet Group Inc (NASDAQ:VNET) sees net revenues between RMB642 and RMB 658 million for the second quarter. This represents a growth of about 38% at the midpoint. For the full year 2014, the company expects it to be RMB2.71 – RMB2.85 billion thus suggesting an uptick of about 40% at the midpoint level from 2013.
