Renren Loss Widens on Lower Revenue, Surge in Expenses

       By John Kell and Michael Calia 

    Revenue for Renren Inc.'s (RENN) namesake business fell while overall expenses surged, driving the Chinese social networking company to a wider loss in the third quarter.

    American depositary shares of Renren fell 8.7% to $3.06 in after-hours trading as the company's fourth-quarter guidance came in well below expectations. Through Wednesday's close, the stock was down 2.9% so far this year.

    For the current quarter, Renren forecast revenue between $29 million to $31 million. Analysts surveyed by Thomson Reuters had estimated revenue of $49 million.

    Renren operates one of the largest social-networking websites in China, as well as a popular daily-deal site, The company has mostly posted adjusted quarterly losses in recent quarters as expenses have often outstripped revenue growth, a trend that continued in the most recent period.

    "While we continue to face short-term monetization challenges, our strategies are becoming more focused and clear," Chief Executive Joseph Chen said, adding: "The restructuring of our gaming business will also make us more focused on developing high-quality games."

    Overall, Renren reported a loss of $24.6 million, or seven cents an ADS, compared with a loss of $15.4 million, or four cents an ADS, a year earlier. Excluding share-based compensation and other items, the company's adjusted loss was $19.7 million, compared with a loss of $12.1 million in the prior-year period.

    Analysts most recently expected an adjusted loss of 10 cents a share.

    The top line declined 5.6% to $47.6 million, near the lower end of the company's downbeat view of $47 million to $49 million.

    Revenue in the namesake division slid 9.9%. Online advertising revenue fell 11%.

    Gross margin widened to 63.1% from 61.4% as input costs fell 9.7%. However, operating expenses jumped 27%.

    Monthly unique log-in users reached 50 million in September, up from 48 million a year earlier.

    Write to John Kell at and Michael Calia at