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Chinese appmaker shares flop after weak forecast, CFO departure

Sheng Fu, chief executive officer of Cheetah Mobile
Billy H.C. Kwok | Bloomberg | Getty Images

Shares of Chinese mobile utility app developer Cheetah Mobile sank Tuesday after the internet company released guidance on the low end of expectations and announced that their chief financial officer has resigned.

Effective March 31, CFO Ka Wai Andy Yeung will leave Cheetah "to pursue other opportunities," according to a press release Tuesday. Yeung "has no disagreement with the Company that led to his resignation," the release said, adding that he will remain an external advisor to smooth the transition.

Until a successor is found, Yuk Keung Francis Ng, a director and chief financial officer at Kingsoft, will become interim CFO.

U.S.-traded shares of Cheetah Mobile, which had a market capitalization of $1.6 billion as of Monday's close, closed the day down nearly 11 percent.

The firm forecast first-quarter revenue of 1.15 billion to 1.19 billion yuan ($166 million to $172 million) against the 1.19 billion yuan ($172 million) expected by analysts, according to FactSet.

However, fourth-quarter earnings beat on revenue and earnings per share. Revenue was 1.27 billion yuan ($184 million) versus a FactSet-estimated 1.23 billion yuan ($178 million).

"We are pleased that the steady and sustained revenue growth generated by our utility apps helped to continue to drive our revenue and profit growth sequentially in the second half of 2016," CEO Sheng Fu said in a release.

"Looking ahead, we remain focused on connecting our over 600 million global Mobile [monthly active users] with more personalized and richer content by capitalizing on emerging artificial intelligence technologies," he said.

Five-day performance of Cheetah Mobile

With the day's moves, shares of Cheetah Mobile are down 16.5 percent over the past six months.