Focus Media (FMCN) reports 4-cent beat on higher than expected revenues

Non-GAAP net income of 52 cents on revenues of $184.6 million.

FMCN has been wild the past few days. Gained 16% today to close @ $37.41. But that’s after losing 27% yesterday.

Shares are 10% higher after hours.

Commenting on the fourth quarter and full year 2007 results, Executive Chairman Jason Jiang said, ''Fourth quarter results far exceeded our own guidance. The upside was driven by robust growth in our in-elevator poster frame business resulting from digital Frame 2.0 upgrade, strong momentum in our mobile handset advertising business, and continued strength in our Internet advertising business. We also made improvements in our Internet advertising business model to increase the gross margin from 23.0% in the third quarter 2007 to 26.4% in the fourth quarter. The results demonstrated the strong leverage built into our business model as we move forward to become the largest digital media company in China. Based on our dialogs with our large advertising clients, we strongly believe the current growth momentum in the China advertising industry will continue after the 2008 Olympics, driven by increasing domestic consumer demand for goods and services as the Chinese economy continues to expand. Our strategy of building the largest life-style digital media platform will allow Focus Media to capture a relatively larger share of this growth. I am fully committed to building Focus Media to be one of the leading digital media companies in the world.''

BUSINESS OUTLOOK

Based on organic growth, the Company estimates its total revenues for full year 2008 to range from $900 million to $930 million, of which digital out-of-home is expected to contribute approximately 63%, Internet advertising is expected to contribute approximately 31%, and mobile handset advertising is expected to contribute approximately 6%. Net income of full year 2008 excluding share-based compensation expenses and amortization of intangible assets resulting from acquisitions (non-GAAP) is expected to be between $280 million to $300 million, taking into consideration a 15% effective income tax rate after certain government tax incentives and rebates, or $2.06 to $2.21 per fully diluted ADS based on 136 million annual average total ADS equivalent shares outstanding. In accordance with SFAS No. 123R, the Company estimates total share-based compensation expenses in 2008 will be approximately $35 million based on stock options that have been granted as of February 28, 2008. The Company expects approximately $50 million in acquisition-related intangible amortization expenses in 2008 including CGEN acquisition, subject to the finalization of the purchase price allocation for recent acquisitions.

The Company expects its capital expenditure for 2008 to be approximately $50 million, mainly for the digital Frame 2.0 upgrade and expansion in both of our residential and commercial networks and digital LED investment in our outdoor LED business.

The Company estimates its total revenues for the first quarter of 2008 will range from $160 million to $165 million. First quarter 2008 net income excluding share-based compensation expenses and amortization of intangible assets resulting from acquisitions (non-GAAP) is expected to be between $44 million and $45 million or $0.33 to $0.34 per fully diluted ADS based on 133 million average total ADS equivalent shares outstanding.