Quick Take: Phoenix New Media Swings to Loss in First Quarter

Phoenix New Media, one of China’s top online news companies, fell into the money-losing column in its latest reporting quarter, blaming a challenging advertising market for its weak performance that also included a big revenue decline.

Phoenix, a unit of Hong Kong-listed Phoenix Satellite Television, has been struggling with a spotty performance over the last year, including periodic dips in its revenue and also periodic losses, reflecting broader difficulties being faced by news portals that depend heavily on advertising for their revenue.

The company reported a net loss of 32.2 million yuan ($4.67 million) for the first quarter of 2017, compared with an 11.6 million yuan profit a year earlier, according to an announcement released in the U.S. on Sunday. Quarterly revenue fell 9% to 294.5 million yuan.

“We entered the year of 2017 with a challenging first quarter due to the continuing headwinds and changes in the Chinese advertising industry,” CEO Liu Shuang said. “We remain confident that we have the right team and strategy in place to withstand the headwinds in the market and expand our market share with the increasing demand of newsfeed services throughout China.”

The company said it expects to post second-quarter revenue of 362 million yuan to 386 million yuan, representing a return to revenue growth from the 350 million yuan reported in the same period a year earlier.

Phoenix’s New York-listed American Depositary Shares have come under pressure as the company struggles to compete with a growing field of internet companies vying for limited advertising dollars. In addition to other news portals and search sites like Baidu Inc., many of China’s fast-growing online video companies also rely heavily on advertising for their revenue.

Phoenix’s stock closed down 1.7% on Friday, the last trading session before the results were announced. At their current level of $3.38, the shares now trade near their all-time low.

Contact reporter Yang Ge (geyang@caixin.com)