Focus Media 2Q Profit Jumps 69%; Next-Generation Rollout On Track

Focus Media Holding Ltd.'s (FMCN) fiscal second-quarter earnings climbed 69%, as the Chinese digital-advertising company said it was on track to roll out its next-generation LCD advertising screens.

American depositary shares were up 7.3% at $29.18 after-hours Monday as the results beat Wall Street expectations. Through the close, the stock has risen 24% so far this year, while the wider market has fallen.

The company has reported quarterly profits for more than a year now, benefiting from restructuring that sloughed off parts of its Internet and billboard businesses in the midst of a six-quarter streak of losses. A recovery in advertising has strengthened revenue, and in the first quarter Focus Media supported its top line by better managing seasonality compared with the year before.

Focus has planned to launch its next generation of liquid crystal display advertising screens in seven cities in the second half, which are designed offer location-based, interactive services for advertisers, an area the company thinks is important for its next stage of growth.

Monday, Chairman and Chief Executive Jason Jiang said the company is on track to finish installation of the interactive screens by October.

The company posted a profit of $42.8 million, or 30 cents per ADS, from $25.3 million, or 17 cents per ADS, a year earlier. Excluding share-based compensation, write-downs and other items, earnings rose to 44 cents share from 30 cents.

Net revenue increased 46% to $179 million.

Analysts surveyed by Thomson Reuters had expected earnings of 37 cents a share on revenue of $163 million.

Gross margin rose to 62.4% from 58.6%.

Sales in the LCD display network segment--the company's largest--increased 42%.