Rediff.com India Ltd.‘s (Nasdaq: REDF) revenue edged up a lower-than-expected 18 percent in the first quarter, sending its American Depositary Shares down 13 percent on the Nasdaq. [via release]The online news and entertainment company posted revenues of US$6.8 million, which was below the US$9.1 million estimate of one analyst polled by Thomson Financial.  Now, I know that it is not fair to compare the results to one analyst’s opinion but the share drop shows that investors gave the results a thumbs down.
The company reported earnings of US$2.12 million, or 7.26 cents per ADS, compared with US$1.98 million, or 6.82 cents per ADS, a year earlier. The disappointment over the results was reflected in the US$2.69 drop to US$17.39 in Thursday trading on the Nasdaq.
The company’s India online unit’s sales rose 14 percent to $4.62 million, while its U.S. publishing unit’s sales jumped 27 percent totaled $2.18 million. The number of registered users on the site grew 26 percent to 56.6 million during the quarter, the company said.
A recent story in Barron’s said Rediff.com’s market cap is way out of proportion to the size of India’s Internet ad market. Data from Comscore shows the traffic has fallen, as the likes of Google and Yahoo make inroads. That could be one of the main reasons for Rediff’s lackluster revenue growth last quarter.