Cheetah Mobile Inc (NYSE:CMCM) Misses Earnings, Topline Estimates

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Cheetah Mobile Inc (NYSE:CMCM) stock fell 3.18% (As on Nov 25, 6:00:38 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the third quarter of FY 21. Revenues from the Company’s internet business decreased by 50.8% year over year and 15.5% quarter over quarter to RMB160.5 million (US$24.9 million) in the third quarter of 2021. The year-over-year decrease was due to the Company’s strategic efforts to diminish the game-related business in past quarters. The quarter-over-quarter decrease was mainly because revenue in the second quarter of 2021 was temporarily increased due to June 18 promotional events and no such promotional event occurred in the third quarter of 2021. Revenues from the AI and others were RMB35.6 million (US$5.5 million) in the third quarter of 2021, representing a 8.8% year-over-year decrease and a 62.8% quarter-over-quarter increase. The year-over-year decline was primarily attributable to the drop in sales of AI-related hardware products. The quarter-over-quarter increase was from our shopping-mall coupon-selling robots business as well as our global cloud services. Non-GAAP gross profit decreased by 51.6% year over year and decreased 24.5% quarter over quarter to RMB121.9 million (US$18.9 million) in the third quarter of 2021. Non-GAAP gross margin was 62.2% in the third quarter of 2021, compared to 69.0% in the third quarter of 2020 and 76.3% in the second quarter of 2021. Non-GAAP net loss attributable to Cheetah Mobile shareholders was RMB44.7 million (US$6.9 million) in the third quarter of 2021, compared to a non-GAAP net income attributable to Cheetah Mobile shareholders of RMB266.3 million in the same period of the last year and non-GAAP net income attributable to Cheetah Mobile shareholders of RMB3.3 million in the second quarter of 2021. As of September 30, 2021, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB1,853.3 million (US$287.6 million).

CMCM in the third quarter of FY 21 has reported the adjusted loss per share of 34 cents, missing the analysts’ estimates for the adjusted earnings per share of 83 cents. The company had reported 46.3 percent fall in the adjusted revenue to $196.11 million in the third quarter of FY 21, beating the analysts’ estimates for revenue of $1.45 billion.

For the fourth quarter of 2021, the Company expects its total revenues to be between RMB130 million (US$20.2 million) and RMB180 million (US$27.9 million).

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