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BRIEF-Opera Software cuts outlook due to softer development in mobile advertising business
December 20, 2016 / 7:25 AM / a year ago

BRIEF-Opera Software cuts outlook due to softer development in mobile advertising business

Dec 20 (Reuters) - Opera Software Asa :

* Opera software asa: lowering of our expectations follows softer performance in our mobile advertising business

* Opera software asa: expects current trading conditions to continue into 1q17, resulting in a relatively soft q1 when compared with 1q16

* Opera software asa: however expects that significant investments we are making in products, in particular SDK, a new core update, artificial intelligence and data science will yield solid revenue growth compared to 2016

* Opera software asa: all of Opera’s other businesses - Opera TV, Bemobi, Skyfire and Surfeasy - are performing in line with our 4q16 expectations

* Opera Software also announces sale of it’s majority stake in its TV business to Moore Freres at an enterprise value of $114.3 mln

* Opera Software asa: when carving out Opera TV from overall fy 2016 ranges given for revenue ($570-600 million) and adjusted ebitda ($60-70 million), ranges would have been $540-570 million revenue and $45-55 million adjusted ebitda

* Opera now expects to end fy 2016 just below these overall ranges for continued operations

* As communicated at our 3Q16 presentation, the mobile advertising business did not exit 3Q16 with the same tailwind as we saw last year. This trend has continued in 4Q16

* Opera software asa: while below our expectations, business is expected to show an overall revenue growth in 2016 of around 15 pct versus 2015

* Opera software asa: as a result, we expect to deliver revenue from our brand and performance revenue which is 10-20 pct below 4q15’

* As a reference, 4Q15 saw exceptionally strong spend from certain key Brand and Performance advertisers, and Opera believes that excluding this extraordinary Q415 spend, the revenue would have been relatively flat in 4Q16 vs 4Q15

* Overall gross margins are strong in the quarter and expected to be flat to slightly up compared to 3Q16 Source text for Eikon: Further company coverage: (Reporting By Ole Petter Skonnord)

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