Autohome Authorizes $400 Million Buyback Amid Revenue Drop
Autohome Inc. (NYSE: ATHM) reported a significant decline in second-quarter revenue, falling by 31.9% year-over-year to RMB1.2 billion and operating profit dropping 56.2%. Despite the downturn, Autohome completed a $200 million share repurchase program and authorized an additional $400 million for future buybacks over the next twelve months. The revenue decline was primarily driven by reduced spending from dealers in lead-generation services (down 23.5%) and a sharp drop of 52.1% in online marketplace revenues, attributed to lower vehicle sales activity. Media-services revenue remained stable at RMB280.4 million. Although operating expenses decreased by 14.3%, net income still fell by 40.4%. Autohome ended the quarter with $2.68 billion in cash and short-term investments, exceeding its market value. The buyback program aims to improve earnings per share for remaining shareholders but faces challenges as revenue erosion outpaces cost reductions. Analysts remain divided on whether these repurchases can offset declining business fundamentals.
