Sohu Com Inc. (SOHU)

[eastunder]

SOHU 3Q earnings 10-31-11 BMO

Sohu.com to Report Third Quarter 2011 Financial Results on October 31, 2011

Monday , October 17, 2011 01:00ET


BEIJING, Oct. 17, 2011 /PRNewswire-Asia/ -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, will report its third quarter 2011 unaudited financial results on Monday, October 31, 2011, before U.S. market hours.


Sohu's management team will host a conference call on the same day at 8:30 a.m. U.S. Eastern Time, October 31, 2011 (8:30 p.m. Beijing/Hong Kong time, October 31, 2011) following the quarterly results announcement.


The dial-in details for the live conference call are:



US Toll-Free: [phone]
International: [phone]
Hong Kong: [phone]
China Mainland [phone] / [phone]
Passcode: SOHU




Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.


A telephone replay of the call will be available after the conclusion of the conference call at 11:30 a.m. Eastern Time on October 31 through November 7, 2011. The dial-in details for the telephone replay are:



International: [phone]
Passcode: 13990173




The live webcast and archive of the conference call will be available on the Investor Relations section of Sohu's website at http://corp.sohu.com/.

[eastunder]

SOHU Gap @ 76.92

Open Gaps

Direction         Date                   range  
 up            Sept-07-2011           76.92 to 77.42  
 

[eastunder]

Gap from 8-26 to 8-29


SOHU 75.40

[johnsyn]

I think the MMs are playing with the price. Especially, since I saw something a few hours ago about expect a few hours of support level between $80-$82 before falling again. Really?

[eastunder]

UPDATE 3-

Sohu slides as investors not game for higher ad spend

1:23 pm ET 08/01/2011 - Reuters


* Analysts expect hit on margins from higher marketing spends

* Q2 EPS $1.10 vs $0.82 yr-ago

* Q2 total revenue rose 36 pct

* Shares sink more than 11 pct (Adds analyst comments in paragraphs 18,19, details in 5; updates share movement)

By Soham Chatterjee and Doris Frankel

BANGALORE/CHICAGO, Aug 1 (Reuters) - Chinese Internet portal Sohu.com Inc's shares fell more than 11 percent on Monday, as a 37 percent rise in quarterly net profit failed to impress investors amidst falling gross margins and higher operating expenses.

"Although Sohu's net income has risen in three straight quarters ... the main area of concern seems to be that this is the fifth straight quarter that it saw shrinking gross margins," TD Ameritrade's chief derivatives strategist JJ Kinahan said.

Over the five-quarter period, margins have contracted almost 1.75 percent per quarter on a year-over-year basis, he said.

"The negative reaction in the stock might be a case of 'buy the rumor, sell the news' as the stock had rallied in the weeks leading up to the report. Prior to today's (losses), the shares had gained nearly 37 percent since June 17," said Frederic Ruffy, options strategist at New York-based WhatsTrading.com.

"Some investors might have been anticipating a strong quarter and are banking profits on the news," he added.

At least two analysts said the company's plans to invest heavily in marketing its new game "Duke of Mount Deer" -- an adaptation of a popular novel by Jin Yong -- may further erode margins and hurt third-quarter earnings.

Sohu's multiplayer online role-playing game unit Changyou.com currently operates seven online games in China, including Tian Long Ba Bu, Blade Online and Blade Hero 2.

Sohu forecast third-quarter net income of $1.20-$1.25 per share. Analysts were looking for earnings of $1.18, according to Thomson Reuters I/B/E/S.

"In terms of top line guidance it's ok, but in terms of bottom line, the company plans to spend $10 million to market its new game," TH Capital Research analyst Tian Hou said.

The company is not going to monetise this game until the fourth quarter, while investors were expecting it to monetise the game in the third quarter, Hou said.

RBS analyst Wendy Huang said Sohu's third-quarter outlook for adjusted net profit of $47-$49 million, implies adjusted net margin of 21 percent, down from 23 percent in the second quarter.

The aggressive investment on new game's launch, search and video may erode margins and earnings in the third-quarter, Huang said in a note to clients.

Sohu, which competes with Sina Corp , NetEase.com and Tencent Holdings , expects third-quarter revenue of $225-$230 million, above market estimates of $207.9 million.

Operating expenses for the second quarter rose 37 percent year-over-year on increases in headcount and average compensation, and higher marketing associated expenses.

Quarterly gross margin fell by 1 percent sequentially to 73 percent.

Sohu's second-quarter net income was $42.7 million, or $1.10 per share, compared with $31.3 million, or 82 cents a share in the year-ago period.

Online game revenue for the second quarter were $101.5 million, up 31 percent from the year-ago quarter.

Shares of Changyou.com Ltd , Sohu's majority-owned unit, also fell about 15 percent after it forecast third-quarter adjusted earnings of 95-98 cents per ADS, below analysts' estimates. [ID: nASA02KBZ]

Shares of the company, which have shed 18 percent of their value since touching a year high of $109.36 on April 28, were down $10.09 at $80.01 in afternoon trade Monday on Nasdaq. About 3.9 million shares, more than double their normal trading volumes, changed hands by 1320 ET. (Reporting by Doris Frankel in Chicago, Saqib Iqbal Ahmed, Sakthi Prasad in Bangalore; Editing by Will Waterman, Roshni Menon and Gopakumar Warrier)

[eastunder]

Nomura Raises Sohu.com (SOHU) to Neutral

8:01 am ET 08/02/2011 -


An analyst at Nomura Securities upgraded shares of Sohu.com (NASDAQ: SOHU) following Q2 results Monday morning. The stock tumbled more than 12 percent during yesterday's trading session.

Nomura now rates Sohu shares a Neutral, up from the prior rating of Reduce. The analyst's price target moves from $64 to $85.

Shares of Sohu are indicated about 2.4 percent higher in pre-market action Tuesday. The stock last traded at $81 even.

[eastunder]

Credit Suisse Upgrades Sohu.com (SOHU) to Outperform

7:18 am ET 08/02/2011 -


Credit Suisse upgraded Sohu.com (NASDAQ: SOHU) from Neutral to Outperform with a price target of $109.60 (from $101.60).

[johnsyn]

Sohu searching for online victoryUpdated: 2011-08-02 08:10By Chen Limin (China Daily)

Sohu.com Inc reported a 37 percent increase in second-quarter net profit, lifted by a strong rise of its online gaming and brand advertising revenues. Da Long / for China Daily

Portal sees the chance to best rival Google in the near future, chairman says

BEIJING - Portal Sohu.com Inc aims to surpass rival Google Inc in China's search market "in the near future", said a top executive, as the US company loses share in the world's largest Internet market.

Charles Zhang, Sohu chairman, said that he expected the company's online search arm, Sogou, to break even next year and overtake Google in market share for online search traffic. "Sogou has attained initial success after several years of development and will become China's second-most-popular search engine with such momentum," Zhang said at a media briefing on Monday.

Sogou, which was spun off from the portal last year, reported second-quarter revenue of $13.6 million, up more than 250 percent, according to Sohu's financial results.

Zhang said Sogou's revenue is expected to reach $16 million next quarter. The search engine is losing about $3 million each quarter at present, he added. Sohu has been vocal about its ambition to overtake Google since the US search engine shut down its Chinese Google.cn service and redirected its mainland traffic to Hong Kong last year.

Google has since lost market share to Chinese competitors including Tencent Holdings Ltd and NetEase.com Inc.

Google had its best time in China in the fourth quarter of 2009 with a market share of 35.9 percent.

However, its share fell to 18.9 percent last quarter, while Baidu Inc claimed 75.9 percent, according to domestic research company Analysys International.

Sogou had just 2.4 percent last quarter.

Last month, another rival - Microsoft Corp - entered into a cooperation agreement with Baidu to provide English-language results from its Bing search engine on Baidu.

Zhang Yaqin, Microsoft's corporate vice-president, said in an interview with China Daily that the move would help the Bing business "get better and better" in China.

To boost Sogou's development, Zhang said the unit would seek a public listing, though he didn't give a timetable. He added that the plan was "not influenced by US investors' current cooling down of enthusiasm for Chinese concept stocks". Sohu reported a 37 percent increase in second-quarter net profit, lifted by a strong rise of its online gaming and brand advertising revenues.

Net income was $42.7 million, compared with $31.3 million a year earlier, said the company's financial report.

China Daily

(China Daily 08/02/2011 page17)

[johnsyn]

I guess that's one answer- but I'm more inclined to only believe the part about profit taking, not "investors punishing for cost increase" Doesn't matter what cost increases are there with any business if the profit increases meets or exceeds the cost.

[eastunder]

Sohu, Changyou Beat, But Shares Fall On Costs

By PETE BARLAS, INVESTOR'S BUSINESS DAILY Posted 05:42 PM ET

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=580072&ven=yahoo

Rising costs spooked investors in Web portal Sohu.com (SOHU) and its games unit, Changyou (CYOU), after both firms early Monday reported Q2 results that handily beat views.

Both companies also gave third-quarter sales guidance that beat analyst expectations, but investors focused on other factors, sending the U.S. shares of Sohu and Changyou down 12.2% and 11.1%, respectively.

The profit and sales numbers for both companies were strong, analysts said.


China's Sohu.com said Q2 per-share profit rose 34% and sales rose 36%, but the stock fell on rising costs. View Enlarged Image

But questions about China's economy as well as rising costs and growth concerns combined to dampen investor enthusiasm for companies that make money from sales of ads and online video games, says Mike Hickey, an analyst for Janco Partners.

"GDP expectations for the broad economy have contracted and inflation is an issue for the Chinese economy," Hickey said. "There is a correlation between the growth of the economy and ad dollars."

In a conference call with analysts, Belinda Wang, Sohu's chief operating officer, said the company expects ad sales to rise 30% to 35% in the second half of the year from the first half.

"That outlook could be a lot less than people had hoped," said Hickey, who expected a higher figure.

It might not have taken much to spook investors, said Adam Krejcik, an analyst for Roth Capital Partners. Before Monday, Sohu's shares had risen 38% since June 15, while Changyou shares were up 82% in 2011.

"There was nothing in the financials or guidance that caused any alarm," Krejcik told IBD. "I guess you could call it profit taking."

In a note published Monday, Krejcik called the Changyou selloff a "buying opportunity."

Krejcik and Hickey both maintain buy ratings on the two stocks.

But Sohu, which owns 68.5% of Changyou, said operating expenses rose 37% from the year-earlier quarter, to $76.8 million, and rose 43% excluding special items. Changyou said its product development expenses rose 55% vs. the year-ago quarter. Sohu's gross profit margin fell to 73% from 74% a year ago. Changyou's fell to 87% from 91%. Changyou blamed the decline to higher bandwidth and server costs related to its "Duke of Mount Deer" game.

Changyou said its sales and marketing expenses rose 37% from Q1, partly due to the preparations to launch "Duke."

"So you have near-term (profit) margin contraction," Hickey said. "They are obviously being penalized for that."

For Q2, Sohu said per-share profit rose 34% from the year-earlier quarter, to $1.10. Revenue rose 36% to $198.7 million. Analysts polled by Thomson Reuters had expected $1.06 and $190.8 million.

For the current quarter, Sohu expects revenue of $225 million to $230 million. Analysts were expecting $206.4 million.

One possible crack in Sohu's armor could be its brand ad business. In Q2, brand ad revenue rose 27% from a year ago. For the current quarter, it doesn't see much, if any, increase in growth, estimating brand ad revenue will rise 27% to 30%, to $75 million-$77 million.

Another concern could be the company's video business.

In the conference call, Charles Zhang, Sohu's chief executive, said revenue from the company's fledgling online video business, mostly ads, rose 152% vs. a year ago. But Zhang said the company has been aggressive in paying to secure the rights for its online video content. He also said Sohu has sublicensed some of its videos to other sites in order to boost revenue.

Fears that Sohu's expenses could be outpacing the growth of its video business could be scaring some investors, Hickey says.

"Investors might be concerned about the margins, that the cost of acquisition of the content has continued to be over what they are generating in revenues," he said.

For its Q2, Changyou reported a profit of $1.02 a share, up 29%, on sales of $105 million, up 35%. Analysts expected 93 cents and $98.9 million. For the current quarter, Changyou expects revenue of $115 million to $118 million, vs. analysts' views for $107.9 million.

During the conference call, Zhang said Changyou's online games business leads the market and should continue to do so. Its portfolio includes its newest game, "Duke of Mount Deer," which is still in beta test mode; its longtime staple "Tian Long Ba Bu"; and games from a May acquisition. It bought a more than 68% stake in online games developer 7Road.

"Changyou has successfully transformed itself into a diversified gaming company and escalated its leading position in China's online gaming industry," Zhang said.

[johnsyn]

Wow, that was ugly finish

[eastunder]

LOLOLOL - That's cute. I like that.

[boo boo]

Sohu's long this stock?

[eastunder]

Sohu Beats Estimate, Sales Soar

http://finance.yahoo.com/news/Sohu-Beats-Estimate-Sales-zacks-934656861.html?x=0&.v=1

However, Sohu continues to face cut throat competition from Baidu Inc. (NasdaqGS: BIDU - News) and Sina Corp. (NasdaqGS: SINA - News). We, therefore, maintain our Neutral recommendation on the stock over the long term. Currently, Sohu has a Zacks #2 Rank, which implies a short-term Buy rating.

Zacks Equity Research, On Monday August 1, 2011, 10:00 am


A leading online brand and Internet portal in China, Sohu.com Inc. (NasdaqGS: SOHU - News) reported strong second quarter 2011 results, driven by robust revenue growth, partially offset by higher expenses.

Earnings per share (EPS) of $1.10 (including stock-based compensation) increased 34.1% from 82 cents reported in the year-ago quarter. Quarterly EPS also beat the Zacks Consensus Estimate of $1.06. However, EPS fell short of the company’s guided range of $1.13 to $1.18.

Second quarter earnings exclude Sohu’s non-controlling interest in the online gaming company Changyou.com Ltd. (NasdaqGS: CYOU - News).

Operating Performance

Gross profit was up 35.7% year over year to $145.5 million. Gross margin on a non-GAAP basis was 73.2%, down 20 basis points (bps) from the year-ago quarter.

The company’s margins were affected by the year-over-year decline in online games gross margin, which stood at 90.0% versus 91.0% in the year-ago quarter. Wireless gross margin plummeted 900 bps on a year-over-year basis to 39.0% in the second quarter.

Online brand advertising gross margin was 62.0% in the reported quarter, up from 58.0% reported in the prior-year quarter. Gross margin for the Search business was 55.0%, a huge increase from 14.0% reported in the year-ago quarter, due to higher volumes.

Operating expenses shot up 37.0% year over year to $76.8 million in the quarter due to the higher product development cost (up 47.3% year over year), sales & marketing expense (up 29.4% year over year) and general & administrative expense (up 38.3% year over year).

Operating profit decreased 6.0% year over year to $68.8 million due to higher operating expenses. The operating margin was flat year over year.

Revenue

Total revenue increased 36.0% year over year to $198.7 million in the reported quarter and surpassed the Zacks Consensus Estimate of $191.0 million.

Reported revenue also exceeded management’s expected range of $188.0 million to $193.0 million. The increase was primarily driven by higher brand advertising, a strong search business and online gaming revenues.

Brand advertising revenue in the quarter grew 27.3% year over year to $67.7 million, handily beating management’s guided range of $65.5 million to $67.5 million. The better-than-expected results were mainly driven by the increasing number of brand advertising customers and strong advertising demand from the IT sector including e-commerce companies.

Search revenue soared 248.7% year over year to $13.6 million in the second quarter. The year-over-year growth was mainly driven by increased search traffic and improved monetization of traffic.

Online game revenues increased 30.6% year over year to $101.5 million, surpassing management’s expectation of $95.0 million to $97.0 million. The increases were mainly due to the continued popularity of Tian Long Ba Bu (TLBB) in China during the quarter and incremental revenue growth from the 7Road acquisition by Changyou.

Online gaming revenues grew on the back of higher active paying accounts (APA) and user base expansion. Aggregate registered accounts for Changyou's games jumped 34.0% year over year.

Average revenue per user (ARPU) was up 15.0% year over year. Aggregate peak concurrent users for Changyou’s games were approximately 1.0 million, down 15.0% year over year.

Wireless revenues increased 5.2% from the year-ago quarter to $11.6 million.

Balance Sheet

As of June 30, 2011, Sohu had a cash position of $734.1 million, compared with $737.9 million at the end of March. At the end of the quarter, Sohu had no debt on its balance sheet.

Outlook

Sohu provided an upbeat third quarter 2011 guidance, beating the Zacks Consensus Estimate. For the third quarter, Sohu expects total revenue in the range of $225.0 million to $230.0 million.

Sohu estimates brand advertising revenues in the range of $75.0 million to $77.0 million, implying a sequential growth of 11.0% to 14.0% and year-over-year growth of 27.0% to 30.0%.

Revenue from Changyou is expected to be between $115.0 million and $118.0 million, of which revenues from online games are expected in the $112.0 million to $114.0 million range.

Management anticipates Sogou revenues of $16.0 million for the third quarter.

Sohu projects net income on a non-GAAP basis, after deducting the non-controlling interest in Changyou, in the range of $47.0 million to $49.0 million and EPS in the range of $1.20 to $1.25. The current Zacks Consensus Estimate for the third quarter is pegged at $1.19 per share.

Recommendation

Sohu is expected to benefit from its strength in online games and China’s growing online advertising industry. The company is also expected to benefit from strong growth in the online video market and increase in advertising spending for 2011.

Most recently, Changyou launched its highly anticipated game Duke of Mount Deer. Changyou has also begun open-beta testing of Legend of Ancient World, a massively multi-player online role-playing game. We believe that Sohu’s promising games portfolio and the growing popularity of Changyou’s games will drive profitability over the long term.

However, Sohu continues to face cut throat competition from Baidu Inc. (NasdaqGS: BIDU - News) and Sina Corp. (NasdaqGS: SINA - News). We, therefore, maintain our Neutral recommendation on the stock over the long term. Currently, Sohu has a Zacks #2 Rank, which implies a short-term Buy rating.

[eastunder]

SOHU: Q2 Adj EPS $1.21 vs 82c Beats $1.05 Est; Guidance Varies from Consensus

http://www.knobias.com/story.htm?eid=3.1.2d4e39e732d5cb1eb609b4366ca522217f64de41c7402b91943c8c456dc5cc89

Monday , August 01, 2011 08:25ET

QUARTER RESULTS
Sohu.com Incorporated (SOHU) reported Q2 results ended June 2011. Q2 Revenues were $198.70M; +36.00% vs yr-ago; BEATING revenue consensus by +4.15%. Q2 EPS was $1.10. Adjusted Q2 EPS was $1.21; +47.56% vs yr-ago; BEATING earnings consensus by +15.24%.

Q2 RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 Revenues:       $198.70M      $146.10M     +36.00%      $190.78M      +4.15% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 EPS:               $1.10           N/A         N/A           N/A         N/A 
 Adj EPS:           $1.21           82c     +47.56%         $1.05     +15.24% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 

GUIDANCE

Q3-11 Revenue Outlook [$225 - $230M]: SOHU expects Q3 2011 revenues of $225 to $230 million. The Q3-11 revenue forecast is above current consensus estimates.
Q3-11 Earnings Outlook [$1.20 - $1.25]: SOHU expects Q3 2011 adjusted EPS of $1.20 to $1.25. The Q3-11 earnings forecast is in-line with current consensus estimates.

[johnsyn]

SOHU.COM REPORTS SECOND QUARTER 2011 UNAUDITED FINANCIAL RESULTS

Record Total Revenues of US$198.7 Million, Up 36% Year-over-Year, Exceeding the High End of Group Guidance by US$5.7 Million;

GAAP Net Income Before Non-Controlling Interest Up 36% Year-over-Year to US$61.6 Million,
Non-GAAP Net Income Before Non-Controlling Interest Up 27% Year-over-Year to US$67.0 Million, Exceeding the High End of Group Guidance by US$5.5 Million;

GAAP Fully Diluted EPS of US$1.10, Non-GAAP Fully Diluted EPS of US$1.21, Exceeding the High End of Group Guidance by 3 US Cents

BEIJING, CHINA, August 1, 2011 ¨C Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, today reported unaudited financial results for the second quarter ended June 30, 2011.

Second Quarter Highlights[1]

Record total revenues and record revenues in online brand advertising, Sogou, and online game businesses. All such operating parameters exceeded the Group¡¯s expectations.
Total revenues were US$198.7 million, up 36% year-over-year and 14% quarter-over-quarter.
Online brand advertising revenues were US$67.7 million, up 27% year-over-year and 19% quarter-over-quarter.
Sogou revenues were US$13.6 million, up 252% year-over-year and 71% quarter-over-quarter.
Online game revenues reached US$101.5 million, up 31% year-over-year and 7% quarter-over-quarter.
GAAP net income attributable to Sohu.com Inc. was US$42.7 million, up 37% year-over-year and 9% quarter-over-quarter, or US$1.10 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. was US$47.4 million, up 27% year-over-year and 8% quarter-over-quarter, or US$1.21 per fully diluted share.
On May 11, 2011, Changyou.com Limited (Changyou), a subsidiary of Sohu, completed the acquisition of 68.258% of the equity in Shenzhen 7Road Technology Co., Ltd. (¡°7Road¡±), a Web-based game company in China. 7Road¡¯s financial statements were consolidated in Changyou¡¯s financial statements starting on June 1, 2011.

¡°I am pleased to report strong financial results for the second quarter,¡± commented Dr. Charles Zhang, chairman and chief executive officer of Sohu.com. ¡°We set new records for total revenue as a result of strong performance in three of our core business lines -- brand ads, Sogou and Changyou, each of which set new individual highs for revenue. Sohu Video outperformed its larger competitors and expanded its audience reach, while Sogou accelerated its growth trajectory with over 250% top-line growth, driven by strong improvements in search traffic and monetization.¡±

Dr. Zhang added, ¡°I am also excited to report that on July 22nd, Changyou launched Duke of Mount Deer, or DMD, which is the company¡¯s second in-house developed game. The unique technological innovations brought about by the four years of development have been well received by players. Since its launch, the user base has been growing steadily and we already need to add more servers. With DMD, our flagship game Tian Long Ba Bu, and the acquisition of 7Road, a Web-based game company in China, Changyou is successfully transforming itself into a diversified gaming company and escalating our leading position in China¡¯s online gaming industry. ¡±

Commenting on Sohu¡¯s online brand advertising business, Ms. Belinda Wang, Co-President and COO added, ¡°Second quarter revenue in our online brand advertising business hit a new high as we saw strong advertising demand from the Internet sector, including e-commerce companies. Among all channels, online video was the fastest growing one with over 150% increase in revenues and nearly 50% increase in the number of advertisers on a year-over-year basis.¡±


Second Quarter Financial Results

Revenues

Total revenues for the second quarter of 2011 were US$198.7 million, up 36% year-over-year and 14% quarter-over-quarter.

Online brand advertising revenues for the second quarter of 2011 totaled US$67.7 million, up 27% year-over-year and 19% quarter-over-quarter. The increases were mainly due to the increased number of brand advertising customers and strong advertising demand from the IT sector including e-commerce companies.

Sogou revenues for the second quarter of 2011 were US$13.6 million, up 252% year-over-year and 71% quarter-over-quarter. Sogou revenues include search and start-up page revenues. The increases were mainly due to increased search traffic and improved monetization of traffic.

Online game revenues for the second quarter of 2011 were US$101.5 million, up 31% year-over-year and 7% quarter-over-quarter.

Wireless revenues for the second quarter of 2011 were US$11.6 million, up 5% year-over-year and down 1% quarter-over-quarter.

Gross Margin

Gross margin was 73% for the second quarter of 2011, compared with 74% in the first quarter of 2011 and 73% in the second quarter of 2010. Non-GAAP gross margin for the second quarter of 2011 was 74%, which was unchanged from the first quarter of 2011 and the second quarter of 2010.

Online brand advertising gross margin for the second quarter of 2011 was 62%, compared with 61% in the first quarter of 2011 and 58% in the second quarter of 2010. Non-GAAP online brand advertising gross margin for the second quarter of 2011 was 63%, compared with 62% in the first quarter of 2011 and 60% in the second quarter of 2010.

Both GAAP and non-GAAP gross margin for Sogou in the second quarter of 2011 were 55%, compared with 39% in the first quarter of 2011 and 14% in the second quarter of 2010.

Both GAAP and non-GAAP gross margin for online games in the second quarter of 2011 were 90%, compared with 91% in the first quarter of 2011 and 91% in the second quarter of 2010.

Both GAAP and non-GAAP gross margin for the wireless business for the second quarter of 2011 were 39%, compared with 41% in the first quarter of 2011 and 48% in the second quarter of 2010.

Operating Expenses

For the second quarter of 2011, Sohu's operating expenses totaled US$76.8 million, up 37% year-over-year and 18% quarter-over-quarter. Non-GAAP operating expenses totaled US$72.9 million, up 43% year-over-year and 20% quarter-over-quarter. The increases in both GAAP and non-GAAP operating expenses were mainly due to increases in both headcount and average compensation and higher expenses associated with marketing activities in the second quarter of 2011.

Operating Margin

Operating margin was 35% for the second quarter of 2011, compared with 36% in the previous quarter and 35% in the second quarter of 2010. Non-GAAP operating margin was 37% for the second quarter of 2011, compared with 39% in the previous quarter and 39% in the second quarter of 2010.

Income Tax Expense

For the second quarter of 2011, excluding a non-cash income tax expense of US$0.9 million recorded for tax benefits from share-based awards, non-GAAP income tax expense was US$9.3 million, compared with US$10.8 million in the previous quarter.

Net Income

Before deducting the share of net income pertaining to the Non-controlling Interest, GAAP net income for the second quarter of 2011 was US$61.6 million, up 36% year-over-year and 12% quarter-over-quarter. Non-GAAP net income for the second quarter of 2011 was US$67.0 million, up 27% year-over-year and 10% quarter-over-quarter, exceeding the high end of the Group¡¯s expectations.

GAAP net income attributable to Sohu.com Inc. for the second quarter of 2011 was US$42.7 million, or US$1.10 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. for the second quarter of 2011 was US$47.4 million, or US$ 1.21 per fully diluted share, up 27% year-over-year and 8% quarter-over-quarter, exceeding the high end of the Group¡¯s expectations.

Cash Balance

Sohu Group continued to maintain a debt-free balance sheet and a strong cash position of US$718.1 million as of June 30 2011.

Ms. Carol Yu, Co-President and CFO of Sohu commented, ¡°We are pleased with our strong second quarter results. Our key online game, online video and Sogou business units are all expanding rapidly as a result of years of steady investment and hard work. We have demonstrated a consistent ability to cultivate new businesses from the incubation stage to the point where they can prosper as a separately listed company. We will continue to proactively support all of our underlying businesses as we strive to create value for our shareholders over the long term.¡±

Supplementary Information for Online Game Results

Second Quarter 2011 Operational Results

Aggregate registered accounts for Changyou¡¯s games[2] increased 34% year-over-year and 13% quarter-over-quarter to 131.9 million.
Aggregate peak concurrent users (¡°PCU¡±) for Changyou¡¯s games were 970,000, down 15% year-over-year and 3% quarter-over-quarter.
Aggregate active paying accounts (¡°APA¡±) for Changyou¡¯s games increased 4% year-over-year and 1% quarter-over-quarter to 2.91 million.
Average revenue per active paying account (¡°ARPU¡±) for Changyou¡¯s games increased 15% year-over-year and 1% quarter-over-quarter to RMB211, which is consistent with Changyou¡¯s intention to have ARPU within a range that keeps Changyou¡¯s games affordable for the majority of Chinese game players.

Second Quarter 2011 Revenues

Online game revenues for the second quarter of 2011, which includes revenues from Changyou¡¯s game operations and overseas licensing revenues and revenues from 7Road, increased 31% year-over-year and 7% quarter-over-quarter to US$101.5 million. The increases were mainly due to the continued popularity of TLBB in China during the quarter and consolidation of 7Road¡¯s financial statements starting on June 1, 2011.

Recent Business Developments

Changyou Completes Acquisition of Majority Stake in 7Road

On May 11, 2011, Changyou completed the acquisition of 68.258% of the equity in 7Road for fixed cash consideration of approximately US$68.26 million, plus additional variable cash consideration of up to a maximum of US$32.76 million that is contingent upon the achievement of specified performance milestones through December 31, 2012. 7Road is a developer of Web-based games and the creator of DDTank, one of the most popular multiplayer Web-based shooting games in China. Translated into 9 different languages, DDTank has been launched in countries or territories overseas including Vietnam, Taiwan, Brazil and others.

Changyou Begins Open Beta Testing of Legend of Ancient World

On May 19, 2011, Changyou began open-beta testing of Legend of Ancient World, the Company¡¯s first 2.5D oriental fantasy massively multi-player online role-playing game. Transporting players back some 4,000 years ago to the ancient Huaxia period, the game allows players to take on multiple roles from a selection of 21 occupations while exploring ancient Chinese civilization. The game was licensed from a game studio in China.

Changyou Licenses Battlefield Online from Electronic Arts

Changyou has entered into a licensing agreement with Electronic Arts, a global leader in digital interactive entertainment, for the exclusive rights to operate Battlefield Online, a massively multiplayer online first-person shooter game in China. The game is the first online game in the Battlefield franchise, which is a long-standing series of first-person shooter games for the PC.

Changyou Begins Open Beta Testing of Duke of Mount Deer

On July 22, 2011, Changyou began open-beta testing of Duke of Mount Deer, Changyou¡¯s inhouse-developed 3D fantasy martial-arts massively multi-player online role-playing game. Using two different game engines and the latest 3D rendering technology, the game displays beautifully rendered, cinematic quality graphics, and recreates the imaginary martial arts world from the final book of Louis Cha¡¯s popular novel series. The game also features Changyou¡¯s self-developed seamless server connectivity technology that, for the first time in a massively multi-player online role-playing game (¡°MMORPG¡±), allows gamers to move beyond the server where they originally registered and engage in competitions and social activities with users that are logged in on separate servers. In addition, the game introduces a novel ¡°server vs. server¡± battle mode that brings communities of users on different servers together to fight against competing teams on other servers for land, resources and dominance over the whole game universe.


Business Outlook
For the third quarter of 2011, Sohu expects:
Total revenues to be between US$225.0 million and US$230.0 million.
Online brand advertising revenues to be between US$75.0 million and US$77.0 million. This implies sequential growth of 11% to 14%, and 27% to 30% year-over-year growth.
Sogou revenues to be around US$16.0 million.
Total revenues from Changyou to be between US$115.0 million and US$118.0 million, including online game revenues of US$112.0 million to US$114.0 million.
Before deducting the share of non-GAAP net income pertaining to the Non-controlling Interest, non-GAAP net income to be between US$64.5 million and US$67.0 million.
Non-GAAP net income attributable to Sohu.com Inc. to be between US$47.0 million and US$49.0 million and non-GAAP fully diluted earnings per share to be between US$1.20 and US$1.25.
Assuming no new grants of share-based awards, compensation expenses and income tax expenses relating to share-based awards to be around US$4.0 million to US$4.8 million. The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the third quarter of 2011, under US GAAP, by 10 to 12 cents.

Non-GAAP Disclosure

To supplement the unaudited consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (¡°GAAP¡±), Sohu's management uses non-GAAP measures of cost of revenues, operating expenses, income tax expense, net income and net income per share, which are adjusted from results based on GAAP to exclude the impact of share-based awards granted to employees in the consolidated statements of operations, which consists mainly of share-based compensation expense and non-cash tax benefits from excess tax deductions related to share-based awards. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

Sohu's management believes excluding the impact of share-based awards from its non-GAAP financial measure is useful for itself and investors. Further, the impact of share-based awards cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts, which have been the basis for information Sohu provides to analysts and investors as guidance for future operating performance. As the impact of share-based awards does not involve any upfront or subsequent cash outflow, Sohu does not factor this in when evaluating and approving expenditures or when determining the allocation of its resources to its business segments. As a result, in general, the monthly financial results for internal reporting and any performance measure for commissions and bonuses are based on non-GAAP financial measures that exclude the impact of share-based awards.

The non-GAAP financial measures are provided to enhance investors¡¯ overall understanding of Sohu's current financial performance and prospects for the future. A limitation of using non-GAAP cost of revenues, operating expenses, net income and net income per share, excluding the impact of share-based awards, is that the impact of share-based awards has been and will continue to be a significant recurring expense in Sohu¡¯s business for the foreseeable future. In order to mitigate these limitations Sohu has provided specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables include details on the reconciliation between the GAAP financial measures that are most directly comparable to the non-GAAP financial measures that have been presented.

Notes to Financial Information

Financial information in this press release other than the information indicated as being non-GAAP is derived from Sohu's unaudited interim financial statements prepared in accordance with GAAP.

Mezzanine Equity consists of non-controlling interests in 7Road and a put option that gives the non-controlling shareholders the right to put their shares to Changyou at a pre-determined price if 7Road achieves specified performance milestones before the expiry of the put option and certain circumstances occur. The put option will expire in 2014. Non-controlling interests of 7Road and the put option are classified as mezzanine equity in Changyou¡¯s consolidated balance sheets, as redemption of the non-controlling interests is not solely within the control of Changyou.

In accordance with ASC subtopic 480-10, Changyou accretes the balance of non-controlling interests to its redemption value over the period from the date of the 7Road acquisition to the earliest exercise date of the put right. Any subsequent changes in the redemption value are considered to be changes in accounting estimates and are also recognized over the same period as net income attributable to mezzanine classified non-controlling interests.....

[eastunder]

Thank you. I'll snag it in print when Seeking Alpha posts it and toss it on the board. I much rather read it, than listen to it. :)

[johnsyn]

Nope- but it was to be available on their e-site very soon (even possibly now)

[eastunder]

Kinda makes you wonder what they said at the CC.

Did you listen to the conference call?

[eastunder]

SOHU:

[johnsyn]

Right now down $2.38, not reacting to debt deal, yet, bet it is still shorters working it, will explode positive after market opens, IMO.

[johnsyn]

guess so, SOHU LONG

[eastunder]

That's okay. Worth repeating, right? ;)

[johnsyn]

whoops- missed that you posted the REUTERS update

[johnsyn]

UPDATE 1-Sohu Q2 net up 37 pct, sees Q3 rev above Street view
Aug 1 (Reuters) - Chinese internet portal Sohu.com Inc posted a 37 percent increase in second-quarter net profit, helped by strong performance in its online games and brand advertising units and forecast third-quarter revenue above market estimates.

For the second quarter, Sohu's GAAP net income was $42.7 million, or $1.10 per share, compared with $31.3 million, or 82 cents a share in the year-ago period.

Sohu reported a non-GAAP net income of $47.4 million, or $1.21 per share, compared with $37.5 million, or 96 cents per share a year ago.

Total revenue for the company, which competes with Sina Corp , NetEase.com and Tencent Holdings , rose 36 percent to $198.7 million.

Analysts, on average, were expecting second quarter earnings of $1.06 a share, excluding items, on revenue of $190.8 million, according to Thomson Reuters I/B/E/S.

"Second quarter revenue in our online brand advertising business hit a new high as we saw strong advertising demand from the Internet sector, including e-commerce companies," Belinda Wang, chief operating officer, said in a statement.

Online game revenues for the second quarter were $101.5 million, up 31 percent from the year-ago quarter.

Sohu said it expected third-quarter total revenue to be between $225 million and $230 million, above market estimates of $207.9 million. (Reporting by Sakthi Prasad in Bangalore; Editing by Will Waterman)

[eastunder]

I posted two articles back to back. I find it amazing the different spin that can be put on one company, and what the media chooses to focus on.

"Sohu Q2 net up 37 percent, sees Q3 revenue above Street view"
byline of Reuters

"Sohu Second-Quarter Net Misses Estimates as Higher Costs Erode Sales Gain"
byline of bloomberg

[eastunder]

Sohu Second-Quarter Net Misses Estimates as Higher Costs Erode Sales Gain

http://www.bloomberg.com/news/2011-08-01/sohu-second-quarter-net-misses-estimates-as-higher-costs-erode-sales-gain.html?cmpid=yhoo


Sohu.com Inc. (SOHU), operator of China’s fifth most-visited website, reported second-quarter profit rose 37 percent, missing analysts’ estimates, after the company boosted spending to offer online games and video services.

Net income was $42.7 million, or $1.10 a share, from $31.3 million, or 82 cents, a year earlier, the Beijing-based company said in a statement today. That missed the $50 million average of six analyst estimates compiled by Bloomberg. Sales rose 36 percent to $198.7 million.

Sohu is increasing spending on video content and stepping up development of its search-engine to attract users, helping the company reduce a reliance on sales of display advertising. Online games unit Changyou.com Ltd. (CYOU) is adding new titles to compete for gamers against bigger rivals including Tencent Holdings Ltd. (700) and NetEase.com (NTES) Inc.

Third-quarter revenue may reach $225 million to $230 million, Sohu said. That compares with the $208.7 million average of 12 analyst estimates compiled by Bloomberg.

Operating expenses rose 37 percent to $76.8 million last quarter, Sohu said.

Sohu rose 1.4 percent to $90.10 in New York trading on July 29, and has advanced 42 percent this year.

Changyou increased second-quarter profit 29 percent to $54.2 million, according to a separate statement today. Sales rose 35 percent to $105 million. Changyou shares gained 2.2 percent to $51.83 before the announcement.

Sohu ranks behind Baidu Inc., China’s biggest search- engine, Tencent’s QQ.com, Sina Corp., and Alibaba Group Holding Ltd.’s Taobao.com in user traffic in China, according to China Websites Ranking, a site run by the Internet Society of China that compiles Web traffic information.

[eastunder]

Sohu Q2 net up 37 percent, sees Q3 revenue above Street view

http://finance.yahoo.com/news/Sohu-Q2-net-up-37-percent-rb-1562407465.html?x=0&.v=1

On Monday August 1, 2011, 2:07 am EDT

(Reuters) - Chinese internet portal Sohu.com Inc (NasdaqGS:SOHU - News) posted a 37 percent increase in second-quarter net profit, helped by strong performance in its online games and brand advertising units and forecast third-quarter revenue above market estimates.

For the second quarter, Sohu's GAAP net income was $42.7 million, or $1.10 per share, compared with $31.3 million, or 82 cents a share in the year-ago period.

Sohu reported a non-GAAP net income of $47.4 million, or $1.21 per share, compared with $37.5 million, or 96 cents per share a year ago.

Total revenue for the company, which competes with Sina Corp (NasdaqGS:SINA - News), NetEase.com (NasdaqGS:NTES - News) and Tencent Holdings (HKSE:0700.HK - News), rose 36 percent to $198.7 million.

Analysts, on average, were expecting second quarter earnings of $1.06 a share, excluding items, on revenue of $190.8 million, according to Thomson Reuters I/B/E/S.

"Second quarter revenue in our online brand advertising business hit a new high as we saw strong advertising demand from the Internet sector, including e-commerce companies," Belinda Wang, chief operating officer, said in a statement.

Online game revenues for the second quarter were $101.5 million, up 31 percent from the year-ago quarter.

Sohu said it expected third-quarter total revenue to be between $225 million and $230 million, above market estimates of $207.9 million.

[eastunder]

Sohu.com Reports Second Quarter 2011 Unaudited Financial Results

Monday , August 01, 2011 01:20ET



BEIJING, Aug. 1, 2011 /PRNewswire-Asia/ -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, today reported unaudited financial results for the second quarter ended June 30, 2011.




Second Quarter Highlights(1)


-- Record total revenues and record revenues in online brand advertising,
Sogou, and online game businesses. All such operating parameters
exceeded the Group's expectations.
-- Total revenues were US$198.7 million, up 36% year-over-year and 14%
quarter-over-quarter.
-- Online brand advertising revenues were US$67.7 million, up 27%
year-over-year and 19% quarter-over-quarter.
-- Sogou revenues were US$13.6 million, up 252% year-over-year and 71%
quarter-over-quarter.
-- Online game revenues reached US$101.5 million, up 31% year-over-year and
7% quarter-over-quarter.
-- GAAP net income attributable to Sohu.com Inc. was US$42.7 million, up
37% year-over-year and 9% quarter-over-quarter, or US$1.10 per fully
diluted share. Non-GAAP net income attributable to Sohu.com Inc. was
US$47.4 million, up 27% year-over-year and 8% quarter-over-quarter, or
US$1.21 per fully diluted share.
-- On May 11, 2011, Changyou.com Limited (Changyou), a subsidiary of Sohu,
completed the acquisition of 68.258% of the equity in Shenzhen 7Road
Technology Co., Ltd. ("7Road"), a Web-based game company in China.
7Road's financial statements were consolidated in Changyou's financial
statements starting on June 1, 2011.




(1) Explanation of the Group's non-GAAP financial measures and related
reconciliations to GAAP financial measures are included in the
accompanying "Non-GAAP Disclosure" and the "Reconciliation to
Unaudited Condensed Consolidated Statements of Operations."



"I am pleased to report strong financial results for the second quarter," commented Dr. Charles Zhang, chairman and chief executive officer of Sohu.com. "We set new records for total revenue as a result of strong performance in three of our core business lines -- brand ads, Sogou and Changyou, each of which set new individual highs for revenue. Sohu Video outperformed its larger competitors and expanded its audience reach, while Sogou accelerated its growth trajectory with over 250% top-line growth, driven by strong improvements in search traffic and monetization."


Dr. Zhang added, "I am also excited to report that on July 22nd, Changyou launched Duke of Mount Deer, or DMD, which is the company's second in-house developed game. The unique technological innovations brought about by the four years of development have been well received by players. Since its launch, the user base has been growing steadily and we already need to add more servers. With DMD, our flagship game Tian Long Ba Bu, and the acquisition of 7Road, a Web-based game company in China, Changyou is successfully transforming itself into a diversified gaming company and escalating our leading position in China's online gaming industry. "


Commenting on Sohu's online brand advertising business, Ms. Belinda Wang, Co-President and COO added, "Second quarter revenue in our online brand advertising business hit a new high as we saw strong advertising demand from the Internet sector, including e-commerce companies. Among all channels, online video was the fastest growing one with over 150% increase in revenues and nearly 50% increase in the number of advertisers on a year-over-year basis."


Second Quarter Financial Results


Revenues


Total revenues for the second quarter of 2011 were US$198.7 million, up 36% year-over-year and 14% quarter-over-quarter.


Online brand advertising revenues for the second quarter of 2011 totaled US$67.7 million, up 27% year-over-year and 19% quarter-over-quarter. The increases were mainly due to the increased number of brand advertising customers and strong advertising demand from the IT sector including e-commerce companies.


Sogou revenues for the second quarter of 2011 were US$13.6 million, up 252% year-over-year and 71% quarter-over-quarter. Sogou revenues include search and start-up page revenues. The increases were mainly due to increased search traffic and improved monetization of traffic.


Online game revenues for the second quarter of 2011 were US$101.5 million, up 31% year-over-year and 7% quarter-over-quarter.


Wireless revenues for the second quarter of 2011 were US$11.6 million, up 5% year-over-year and down 1% quarter-over-quarter.


Gross Margin


Gross margin was 73% for the second quarter of 2011, compared with 74% in the first quarter of 2011 and 73% in the second quarter of 2010. Non-GAAP gross margin for the second quarter of 2011 was 74%, which was unchanged from the first quarter of 2011 and the second quarter of 2010.


Online brand advertising gross margin for the second quarter of 2011 was 62%, compared with 61% in the first quarter of 2011 and 58% in the second quarter of 2010. Non-GAAP online brand advertising gross margin for the second quarter of 2011 was 63%, compared with 62% in the first quarter of 2011 and 60% in the second quarter of 2010.


Both GAAP and non-GAAP gross margin for Sogou in the second quarter of 2011 were 55%, compared with 39% in the first quarter of 2011 and 14% in the second quarter of 2010.


Both GAAP and non-GAAP gross margin for online games in the second quarter of 2011 were 90%, compared with 91% in the first quarter of 2011 and 91% in the second quarter of 2010.


Both GAAP and non-GAAP gross margin for the wireless business for the second quarter of 2011 were 39%, compared with 41% in the first quarter of 2011 and 48% in the second quarter of 2010.


Operating Expenses


For the second quarter of 2011, Sohu's operating expenses totaled US$76.8 million, up 37% year-over-year and 18% quarter-over-quarter. Non-GAAP operating expenses totaled US$72.9 million, up 43% year-over-year and 20% quarter-over-quarter. The increases in both GAAP and non-GAAP operating expenses were mainly due to increases in both headcount and average compensation and higher expenses associated with marketing activities in the second quarter of 2011.


Operating Margin


Operating margin was 35% for the second quarter of 2011, compared with 36% in the previous quarter and 35% in the second quarter of 2010. Non-GAAP operating margin was 37% for the second quarter of 2011, compared with 39% in the previous quarter and 39% in the second quarter of 2010.


Income Tax Expense


For the second quarter of 2011, excluding a non-cash income tax expense of US$0.9 million recorded for tax benefits from share-based awards, non-GAAP income tax expense was US$9.3 million, compared with US$10.8 million in the previous quarter.


Net Income


Before deducting the share of net income pertaining to the Non-controlling Interest, GAAP net income for the second quarter of 2011 was US$61.6 million, up 36% year-over-year and 12% quarter-over-quarter. Non-GAAP net income for the second quarter of 2011 was US$67.0 million, up 27% year-over-year and 10% quarter-over-quarter, exceeding the high end of the Group's expectations.


GAAP net income attributable to Sohu.com Inc. for the second quarter of 2011 was US$42.7 million, or US$1.10 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. for the second quarter of 2011 was US$47.4 million, or US$ 1.21 per fully diluted share, up 27% year-over-year and 8% quarter-over-quarter, exceeding the high end of the Group's expectations.


Cash Balance


Sohu Group continued to maintain a debt-free balance sheet and a strong cash position of US$718.1 million as of June 30 2011.


Ms. Carol Yu, Co-President and CFO of Sohu commented, "We are pleased with our strong second quarter results. Our key online game, online video and Sogou business units are all expanding rapidly as a result of years of steady investment and hard work. We have demonstrated a consistent ability to cultivate new businesses from the incubation stage to the point where they can prosper as a separately listed company. We will continue to proactively support all of our underlying businesses as we strive to create value for our shareholders over the long term."


Supplementary Information for Online Game Results


Second Quarter 2011 Operational Results


-- Aggregate registered accounts for Changyou's games(2) increased 34%
year-over-year and 13% quarter-over-quarter to 131.9 million.
-- Aggregate peak concurrent users ("PCU") for Changyou's games were
970,000, down 15% year-over-year and 3% quarter-over-quarter.
-- Aggregate active paying accounts ("APA") for Changyou's games increased
4% year-over-year and 1% quarter-over-quarter to 2.91 million.
-- Average revenue per active paying account ("ARPU") for Changyou's games
increased 15% year-over-year and 1% quarter-over-quarter to RMB211,
which is consistent with Changyou's intention to have ARPU within a
range that keeps Changyou's games affordable for the majority of Chinese
game players.




(2) Comprises the following games operated in China: Tian Long Ba Bu
("TLBB"), Blade Online, Blade Hero 2, Da Hua Shui Hu, Zhong Hua Ying
Xiong, Immortal Faith, San Jie Qi Yuan and Legend of Ancient World.




Second Quarter 2011 Revenues


Online game revenues for the second quarter of 2011, which includes revenues from Changyou's game operations and overseas licensing revenues and revenues from 7Road, increased 31% year-over-year and 7% quarter-over-quarter to US$101.5 million. The increases were mainly due to the continued popularity of TLBB in China during the quarter and consolidation of 7Road's financial statements starting on June 1, 2011.


Recent Business Developments


Changyou Completes Acquisition of Majority Stake in 7Road


On May 11, 2011, Changyou completed the acquisition of 68.258% of the equity in 7Road for fixed cash consideration of approximately US$68.26 million, plus additional variable cash consideration of up to a maximum of US$32.76 million that is contingent upon the achievement of specified performance milestones through December 31, 2012. 7Road is a developer of Web-based games and the creator of DDTank, one of the most popular multiplayer Web-based shooting games in China. Translated into 9 different languages, DDTank has been launched in countries or territories overseas including Vietnam, Taiwan, Brazil and others.


Changyou Begins Open Beta Testing of Legend of Ancient World


On May 19, 2011, Changyou began open-beta testing of Legend of Ancient World, the Company's first 2.5D oriental fantasy massively multi-player online role-playing game. Transporting players back some 4,000 years ago to the ancient Huaxia period, the game allows players to take on multiple roles from a selection of 21 occupations while exploring ancient Chinese civilization. The game was licensed from a game studio in China.


Changyou Licenses Battlefield Online from Electronic Arts


Changyou has entered into a licensing agreement with Electronic Arts, a global leader in digital interactive entertainment, for the exclusive rights to operate Battlefield Online, a massively multiplayer online first-person shooter game in China. The game is the first online game in the Battlefield franchise, which is a long-standing series of first-person shooter games for the PC.


Changyou Begins Open Beta Testing of Duke of Mount Deer


On July 22, 2011, Changyou began open-beta testing of Duke of Mount Deer, Changyou's inhouse-developed 3D fantasy martial-arts massively multi-player online role-playing game. Using two different game engines and the latest 3D rendering technology, the game displays beautifully rendered, cinematic quality graphics, and recreates the imaginary martial arts world from the final book of Louis Cha's popular novel series. The game also features Changyou's self-developed seamless server connectivity technology that, for the first time in a massively multi-player online role-playing game ("MMORPG"), allows gamers to move beyond the server where they originally registered and engage in competitions and social activities with users that are logged in on separate servers. In addition, the game introduces a novel "server vs. server" battle mode that brings communities of users on different servers together to fight against competing teams on other servers for land, resources and dominance over the whole game universe.


Business Outlook


For the third quarter of 2011, Sohu expects:

-- Total revenues to be between US$225.0 million and US$230.0 million.
-- Online brand advertising revenues to be between US$75.0 million and
US$77.0 million. This implies sequential growth of 11% to 14%, and 27%
to 30% year-over-year growth.
-- Sogou revenues to be around US$16.0 million.
-- Total revenues from Changyou to be between US$115.0 million and US$118.0
million, including online game revenues of US$112.0 million to US$114.0
million.
-- Before deducting the share of non-GAAP net income pertaining to the
Non-controlling Interest, non-GAAP net income to be between US$64.5
million and US$67.0 million.
-- Non-GAAP net income attributable to Sohu.com Inc. to be between US$47.0
million and US$49.0 million and non-GAAP fully diluted earnings per
share to be between US$1.20 and US$1.25.
-- Assuming no new grants of share-based awards, compensation expenses and
income tax expenses relating to share-based awards to be around US$4.0
million to US$4.8 million. The estimated impact of this expense is
expected to reduce Sohu's fully diluted earnings per share for the third
quarter of 2011, under US GAAP, by 10 to 12 cents.

Continued at: http://www.knobias.com/story.htm?eid=3.1.8c05dd3f513f9439b345059bed53632696f929850c09ebe7406296dcf924c753

[johnsyn]

5:34 AM Sohu.com (SOHU): Q2 EPS of $1.21 beats by $0.09. Revenue of $198.7M (+36% Y/Y) beats by $8.2M. (PR)

[eastunder]

SOHU 2Q earnings 8-1-11 BMO

Sohu.com to Report Second Quarter 2011 Financial Results on August 1, 2011

Monday , July 11, 2011 01:03ET

BEIJING, July 11, 2011 /PRNewswire-Asia/ -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, will report its second quarter 2011 unaudited financial results on Monday, August 1, 2011, before U.S. market hours.


Sohu's management team will host a conference call on the same day at 8:30 a.m. U.S. Eastern Time, August 1, 2011 (8:30 p.m. Beijing/Hong Kong time, August 1, 2011) following the quarterly results announcement.

The dial-in details for the live conference call are:


US Toll-Free: [phone]
International: [phone]
Hong Kong: [phone]
China Mainland: [phone] / [phone]
Passcode: SOHU



Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.


A telephone replay of the call will be available after the conclusion of the conference call at 11:30 a.m. Eastern Time on August 1 through August 8, 2011. The dial-in details for the telephone replay are:


International: [phone]
Passcode: 81711413



The live webcast and archive of the conference call will be available on the Investor Relations section of Sohu's website at http://corp.sohu.com/.

[eastunder]

SOHU

[eastunder]

Macquarie Upgrades Sohu.com (SOHU) to Outperform, Price Target Raised to $125

8:46 am ET 04/27/2011-

Shares of Sohu.com (NASDAQ: SOHU) are moving higher ahead of Wednesday morning's opening bell as an analyst at Macquarie upgraded the stock from Neutral to Outperform earlier. The firm boosted its price target on the stock from $100 to $125.

Macquarie's upgrade follows Q1 results from Sohu on Monday morning. The stock rose nearly 9 percent following the report, and fell about 3 percent during Tuesday's trading session.

With Sohu shares up 2 percent to $103.05 this morning, Macquarie's new price target implies potential upside of about 21 percent.

[eastunder]

Sohu.com, Changyou Charge Ahead

By DONALD H. GOLD, INVESTOR'S BUSINESS DAILY


When Goldman Sachs downgraded Sina (SINA) to sell on Thursday, that stock's 13% dive made its entire family of stocks look risky.

But strong quarterly results from Sohu.com (SOHU) and Changyou.com (CYOU) show that a shift may be under way in China's online empires.

Sohu, one of the leaders in China's booming online gaming industry, shot up 9% on Monday, as volume swelled to nearly five times its norm. The stock passed the 102.52 buy point from a three-weeks-tight pattern.


That pattern, an add-on entry point rather than a base, came close on the heels of a six-week cup- without-handle base.

That base, in turn, was the second half of a base-on-base pattern. The first base, also a cup, appeared from the Nov. 12 week through the Jan. 28 week.

Each of Sohu's patterns was progressively tighter. This is positive action, as it shows institutional buyers with bids ready for any modest dip. Volume soared on each breakout, just as you'd want.

Sohu earned $1.13 a share in Q1, a gain of 31%, the company announced before the opening bell on Wall Street. Including certain items, Sohu earned $1.01 a share.

Sohu's results exceeded expectations.

Sales rose 35%, Sohu's fourth straight quarter of accelerating growth. This result also beat expectations. Sohu hadn't scored a sales rise that large since Q1 of 2009.

Changyou, a separately traded unit of Sohu, also reported good news.

Earnings rose 27% in Q1, its best showing since Q4 of 2009. Sales climbed 35%, its best result in seven quarters and a third straight acceleration.

Changyou also said it will pay $68.3 million for a majority stake in Shenzhen 7Road Technology, a Web-based gaming company. (Read more here.)

Changyou gapped up and soared 10% in monster trade, breaking out of an 11-week base with a 39.82 buy point. The stock last week cleared the March 3 high at 38.87, another level of resistance.

Sina, meanwhile, rebounded 4%, rising almost enough to fill the downside trading gap created by Thursday's big loss.

One might be heartened by this action but for the fact that Sina had been showing symptoms of a climax top just before the Goldman Sachs downgrade.

Sina, Sohu and Changyou are three different companies with some overlapping.

Sina is a Web portal, but gaming is a much smaller part of its menu than it is for Sohu or Changyou. Its recent surge — 240% in seven months — was fueled by the introduction of its Twitter-like Weibo product.

Sohu.com's two big segments include gaming and online brand advertising.

Both Sina and Sohu offer search, mobile services and email.

Changyou, which was spun off two years ago, is a nearly pure play in gaming.
****************************************************************

My chart, Not IBDS

[eastunder]

China’s Sohu Climbs to Record After Earnings Exceed Estimates
By Belinda Cao - Apr 25, 2011 2:30 PM MT

Sohu.com Inc. (SOHU), the owner of China’s fourth-most visited website, rose to a record in U.S. trading after reporting a 48 percent increase in first-quarter profit, beating analysts’ estimates.

The shares surged 8.8 percent to $104.14 at 4 p.m. in New York, and earlier climbed as much as 12 percent. The Beijing- based company reported first-quarter net income of $44.8 million, or $1.01 a share, compared with $30.2 million, or 73 cents, last year. Profit exceeded the $41.8 million average estimate of seven analysts surveyed by Bloomberg.

Sales rose 35 percent to $174.4 million as online advertising revenue increased 45 percent from a year ago. Sohu also said its online games unit Changyou.com Ltd. (CYOU) will unveil a new game, Duke of Mount Deer. The unit will pay as much as $101 million to buy a majority stake in Shenzhen 7Road Technology Co., a website game developer, according to Sohu’s release.

“Shares are likely benefiting from continued market share gains within the online video segment, where investors are willing to speculate on accelerated growth potential,” said Mike Hickey, an equity analyst at Janco Partners Inc. in Greenwood Village, Colorado, in an e-mailed reply to questions. “Near-term performance shows considerable strength from their legacy portal advertising segment and online games.”

Changyou’s first-quarter profit rose 33 percent to $52.8 million, according to a separate statement today. The American depositary receipts of Changyou jumped 9 percent to $43.36, the highest since July 2009. It rose as much as 11 percent earlier in the day.

Looking Forward
“Changyou’s revenue and earnings are consolidated into Sohu’s financial statement,” said Andy Yeung, an equity analyst at Oppenheimer & Co. in New York. “So whatever benefits Changyou would benefit Sohu as well.”

Sohu forecast second-quarter revenue between $188 million and $193 million, compared with the $183.2 million average of 11 analyst estimates compiled by Bloomberg. The shares have risen 64 percent this year.

Profit margin is likely to narrow in the second quarter because of marketing costs for the new game, according to Yeung. “Investors are looking beyond the second-quarter performance, more into the third and fourth quarter on potential upsides coming from the new game launch,” he said.

Sohu ranks behind Baidu, China’s biggest search-engine, Tencent Holdings Ltd.’s QQ.com, Sina Corp., and Alibaba’s Taobao.com in user traffic in China, according to China Websites Ranking, a site run by the Internet Society of China, which compiles Web traffic information.

[eastunder]

Sohu.com Reports First Quarter 2011 Unaudited Financial Results

Monday , April 25, 2011 01:00ET

BEIJING, April 25, 2011 /PRNewswire-Asia/ -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, today reported unaudited financial results for the first quarter ended March 31, 2011.


First Quarter Highlights(1)


-- Record total revenues and record revenues in search and online game
businesses. All such operating parameters exceeded the Group's
expectations.
-- Total revenues were US$174.4 million, up 35% year-over-year and 1%
quarter-over-quarter.
-- Online brand advertising revenues were US$57.2 million, up 45%
year-over-year and down 5% quarter-over-quarter, exceeding the high end
of Group guidance.
-- Search revenues were US$8.0 million, up 183% year-over-year and 21%
quarter-over-quarter.
-- Online game revenues reached US$94.9 million, up 32% year-over-year and
3% quarter-over-quarter, exceeding the high end of Group guidance.
-- After deducting the share of net income pertaining to the
Non-controlling Interest, GAAP net income was US$39.3 million, up 41%
year-over-year and down 5% quarter-over-quarter, or US$1.01 per fully
diluted share. Non-GAAP net income was US$44.0 million, up 30%
year-over-year and down 8% quarter-over-quarter, or US$1.13 per fully
diluted share.




(1) Explanation of the Group's non-GAAP financial measures and related
reconciliations to GAAP financial measures are included in the
accompanying "Non-GAAP Disclosure" and the "Reconciliation to
Unaudited Condensed Consolidated Statements of Operations."



Dr. Charles Zhang, Chairman and CEO of Sohu, commented, "In addition to our solid financial results, there are a few areas in particular that I would like to highlight. First, on online video, our conscientious efforts to expand our library of authorized and self-produced premium content have increased our market share in terms of total time users spent watching online video from 13% in December 2010 to 16% in March 2011. This ranks us second in the market according to iResearch. Second, Sogou's business continues its momentum, and over the first quarter of 2011 active users of Sogou's browser, search traffic and search revenue all grew north of 20% quarter-over-quarter. And third, on online games, while our leading game franchise, Tian Long Ba Bu, or TLBB, continues to attract new, existing and returning players to its community, today also marks two significant events for our online game subsidiary Changyou. First, Changyou just unveiled an updated version of its upcoming game Duke of Mount Deer, or DMD and will launch the most-anticipated game this summer. Second, we have entered into a definitive agreement to acquire a majority stake in Shenzhen 7Road Technology Co., Ltd. and its affiliates, or 7Road, a reputable web-based game developer that created DDTank, one of the most popular web-based games in China. This will expand Changyou's product portfolio to cover not only MMORPG games but also web-based games."


Commenting on Sohu's online brand advertising business, Ms. Belinda Wang, Co-President and COO added, "We achieved another solid quarter in our online brand advertising business. Online brand advertising revenues for the first quarter of 2011 rose 45% compared with the first quarter of 2010. We are optimistic that growth in the advertising market will remain strong as the economy continues to expand. In particular, we expect to pick up traction in online video as advertisers allocate greater spending to this popular and fast growing area of consumer entertainment."


First Quarter Financial Results


Revenues


Total revenues for the first quarter of 2011 were US$174.4 million, up 35% year-over-year and 1% quarter-over-quarter.


Online brand advertising revenues for the first quarter of 2011 totaled US$57.2 million, up 45% year-over-year and down 5% quarter-over-quarter.


Search revenues for the first quarter of 2011 were US$8.0 million, up 183% year-over-year and 21% quarter-over-quarter. The increase was driven by our increased search traffic and start-up page business.


Online game revenues for the first quarter of 2011 were US$94.9 million, up 32% year-over-year and 3% quarter-over-quarter.


Wireless revenues for the first quarter of 2011 were US$11.7 million, down 12% year-over-year and 19% quarter-over-quarter. The decrease was mainly due to our having stopped promoting our products in March, 2011.


Gross Margin


Gross margin was 74% for the first quarter of 2011, compared with 74% in the fourth quarter of 2010 and 75% in the first quarter of 2010. Non-GAAP gross margin for the first quarter of 2011 was 74%, compared with 75% in the fourth quarter of 2010 and 75% in the first quarter of 2010.


Online brand advertising gross margin for the first quarter of 2011 was 61%, compared with 60% in the fourth quarter of 2010 and 56% in the first quarter of 2010. Non-GAAP online brand advertising gross margin for the first quarter of 2011 was 62%, compared with 63% in the fourth quarter of 2010 and 59% in the first quarter of 2010.


Both GAAP and non-GAAP gross margin for the search business in the first quarter of 2011 were 39%, compared with 32% in the fourth quarter of 2010 and 3% in the first quarter of 2010.


Both GAAP and non-GAAP gross margin for online games in the first quarter of 2011 were 91%, compared with 90% in the fourth quarter of 2010 and 93% in the first quarter of 2010.


Both GAAP and non-GAAP gross margin for the wireless business for the first quarter of 2011 were 41%, compared with 45% in the fourth quarter of 2010 and 48% in the first quarter of 2010.


Operating Expenses


For the first quarter of 2011, Sohu's operating expenses totaled US$65.1 million, up 34% year-over-year and 5% quarter-over-quarter. Non-GAAP operating expenses totaled US$60.6 million, up 41% year-over-year and 9% quarter-over-quarter. The year-over-year increases in both GAAP and non-GAAP operating expenses were primarily attributable to the higher salaries and benefits expense and the increase in marketing expense in the first quarter of 2011.


Operating Margin


Operating margin was 36% for the first quarter of 2011, compared with 38% in the previous quarter and 37% in the first quarter of 2010. Non-GAAP operating margin was 39% for the first quarter of 2011, compared with 43% in the previous quarter and 42% in the first quarter of 2010.


Income Tax Expense


For the first quarter of 2011, excluding a non-cash income tax expense of US$0.2 million recorded for tax benefits from share-based awards, non-GAAP income tax expense was US$10.8 million, compared with US$11.1 million in the previous quarter.


Net Income


Before deducting the share of net income pertaining to the Non-controlling Interest, GAAP net income for the first quarter of 2011 was US$55.2 million, up 34% year-over-year and down 4% quarter-over-quarter. Non-GAAP net income for the first quarter of 2011 was US$60.6 million, up 25% year-over-year and down 6% quarter-over-quarter, exceeding the high end of the Group's expectations.


After deducting the share of net income pertaining to the Non-controlling Interest, GAAP net income for the first quarter of 2011 was US$39.3 million, or US$ 1.01 per fully diluted share. Non-GAAP net income for the first quarter of 2011 was US$44.0 million, or US$ 1.13 per fully diluted share, up 30% year-over-year and down 8% quarter-over-quarter, exceeding the high end of the Group's expectations.


Cash Balance


Sohu Group continued to maintain a debt-free balance sheet and a strong cash position of US$737.9 million as of March 31 2011.


Ms. Carol Yu, Co-President and CFO of Sohu commented, "The independent listing of Changyou in 2009 was followed by exciting growth of our gaming business. With the launch of DMD and the addition of web-based games to our portfolio, it is evident that this business will continue to contribute handsome profitability and cashflows to the Sohu Group. Our new capital structure for our Sogou business has also generated encouraging results to-date. Management will continue to explore and execute optimal capital structures for our underlying businesses to ensure sustainable growth and deliver value to our shareholders over the long term. "


Supplementary Information for Online Game Results


First Quarter 2011 Operational Results


Aggregate registered accounts for Changyou's games(2) as of March 31, 2011 increased 5% quarter-over-quarter and 33% year-over-year to 116.5 million.


Aggregate peak concurrent users ("PCU") for Changyou's games were 1 million, a decrease of 3% quarter-over-quarter and an increase of 10% year-over-year.


Aggregate active paying accounts ("APA") for Changyou's games increased 7% quarter-over-quarter and 21% year-over-year to 2.88 million.


Average revenue per active paying account ("ARPU") for Changyou's games decreased 4% quarter-over-quarter and increased 4% year-over-year to RMB210, which is consistent with Changyou's intention to have ARPU within a range that keeps Changyou's games affordable for the majority of Chinese game players.




(2) Comprises the following games operated in China: Tian Long Ba Bu
("TLBB"), Blade Online, Blade Hero 2, Da Hua Shui Hu, Zhong Hua Ying
Xiong, Immortal Faith and San Jie Qi Yuan.



First Quarter 2011 Revenues


Online game revenues, which includes revenues from game operations and overseas licensing revenues, for the first quarter of 2011 increased 3% quarter-over-quarter and 32% year-over-year to US$94.9 million.


Revenues from game operations for the first quarter of 2011 increased 4% quarter-over-quarter and 32% year-over-year to US$92.9 million. The increases were mainly due to the continued popularity of TLBB in China.


Overseas licensing revenues for the first quarter of 2011 decreased 10% quarter-over-quarter and increased 7% year-over-year to US$2.0 million. The sequential decrease was largely the result of greater competition in mature online game markets abroad. The year-over-year increase was mainly due to increased momentum of TLBB in Vietnam and Thailand in the first quarter of 2011.


Recent Business Developments


Changyou to Acquire Majority Stake in 7Road


On April 22, 2011, Changyou entered into a definitive agreement under which Changyou will acquire 68.258% of the equity in 7Road for fixed cash consideration of approximately US$68.26 million, plus additional variable cash consideration of up to a maximum of US$32.76 million that is contingent upon the achievement of specified performance milestones through December 31, 2012. 7Road is a developer of web-based games and the creator of DDTank, one of the most popular multiplayer web-based shooting games in China. The acquisition will broaden Changyou's product offerings to include web-based games and bring in a team of experienced developers. The acquisition is expected to be completed by June 30, 2011, subject to regulatory approvals and other customary conditions specified in the agreement.


Business Outlook


For the second quarter of 2011, Sohu estimates:


-- Total revenues to be between US$188.0 million and US$193.0million.
-- Online brand Advertising revenues to be between US$65.5 million and
US$67.5 million. This implies a sequential growth of 15 % to 18%, and
23% to 27% year-over-year growth.
-- Search revenues to be around US$11 million.
-- Total revenues from Changyou to be between US$97.0 million and US$100.0
million, including online games revenues of US$95.0 million to US$97.0
million.
-- Before deducting the share of non-GAAP net income pertaining to the
Non-controlling Interest, Sohu estimates its pro forma non-GAAP net
income to be between US$59.0 million and US$61.5 million.
-- After deducting the share of non-GAAP net income pertaining to the
Non-controlling Interest, Sohu estimates non-GAAP net income to be
between US$44.0 million and US$46.0 million and non-GAAP fully diluted
earnings per share to be between US$1.13 and US$1.18.
-- Assuming no new grants of share-based awards, Sohu estimates that
compensation expenses and income tax expenses relating to share-based
awards will be around US$4.0 million to US$4.8 million. The estimated
impact of this expense is expected to reduce Sohu's fully diluted
earnings per share for the second quarter of 2011, under US GAAP, by 10
to 12 cents.


Continued at:

http://www.knobias.com/story.htm?eid=3.1.a850f67114d1965be5e2995725f5e729cd90bc53365893b9ae2ab2f0ea48392f

[eastunder]

SOHU: Q1 Adj EPS $1.13 vs 86c Beats 97c Est; Guidance Above Consensus

Monday , April 25, 2011 08:47ET

QUARTER RESULTS
Sohu.com Incorporated (SOHU) reported Q1 results ended March 2011. Q1 Revenues were $174.40M; +34.72% vs yr-ago; BEATING revenue consensus by +3.21%. Q1 EPS was $1.01. Adjusted Q1 EPS was $1.13; +31.40% vs yr-ago; BEATING earnings consensus by +16.49%.

Q1 RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 Revenues:       $174.40M      $129.45M     +34.72%      $168.98M      +3.21% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 EPS:               $1.01           N/A         N/A           N/A         N/A 
 Adj EPS:           $1.13           86c     +31.40%           97c     +16.49% 
 ----------  ------------  ------------  ----------  ------------  ----------

GUIDANCE

Q2-11 Revenue Outlook [$188.0 - $193.0M]: Total revenues to be between US$188.0 million and US$193.0million. The Q2-11 revenue forecast is above current consensus estimates.





ORIGINAL EARNINGS RELEASE
Consensus estimate data provided by Reuters.
Visit Knobias.com for more indepth earnings information.

[johnsyn]

Sohu.com, one of China’s leading online media, search and gaming companies, this morning announced that its massively MMORPG subsidiary Changyou.com is to acquire a majority stake in Shenzhen 7Road Technology (“7Road”), an online games developer and publisher based in China.

Changyou will acquire 68.26% of the equity of 7Road for approximately $68.26 million in cash (see how that works?), plus additional variable cash consideration of up to a maximum of $32.76 million in performance-based earn-outs.

The acquisition is expected to be completed by June 30, 2011.

With the acquisition, Changyou aims to expand to new audiences by adding a development team that specialized in browser-based, rather casual games rather than the massively multiplayer online games Changyou has to date been known for.

7Road is the company behind DDTank, one of the most popular multiplayer shooting games in China that hit more than 350,000 peak concurrent users globally in Q4 2010.

Changyou.com began operations as a business unit within Sohu.com back in 2003 was carved out as a separate company in December 2007 and completed an IPO on April 7, 2009.

The company this morning reported quarterly earnings: total revenues reached a record $97.1 million, an increase of 35 percent year-over-year. Net income rose to $52.8 million, or $0.99 per share, an increase of 33 percent year-year

[eastunder]

The stock cleared a short cup base March 29. It's now 6% above the 90.58 buy point.

Sohu.com carries a best-possible Composite Rating of 99. (IBD terminology)

[eastunder]

NetEase, Sohu Unfazed By Market Tumble

By ALAN R. ELLIOTT, INVESTOR'S BUSINESS DAILY
Posted 04/18/2011 07:02 PM ET

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=569506&ven=yahoo

China's online gaming industry proved resilient amid a tough market Monday, with both NetEase.com (NTES) and Sohu.com (SOHU) posting gains.

IBD's Computer Software-Gaming industry group rose sharply over the past two weeks to No. 47 in Monday's IBD, up from No. 124 in early January.

The largest company in the group is Japan-based Nintendo (NTDOY), with more than $15 billion in revenue last year. Next in line is Activision Blizzard (ATVI), based in Santa Monica, Calif., with revenue of $4.4 billion.

Both hold weak Composite Ratings and fell Monday.

NetEase.com added more than 1% Monday; Sohu.com rose a fraction. Both are based in China, tapping the country's insatiable urge for online gaming and social networking.

NetEase.com saw more than 90% of its $820 million in revenue last year from online gaming services, charging users fees to play. Advertising sales accounted for most of the remainder.

NetEase's focus is on what it calls massively multiplayer online and role-playing games, or MMORPG. The games take place in virtual worlds and can involve many thousands of simultaneous players.

The newest addition to this market was the 3-D StarCraft II game, introduced in late March. The game was developed and is owned by Activision Blizzard.

NetEase.com found support at its 10-week moving average as StarCraft was introduced in late March. Shares are now extended above that buy range.

NetEase.com holds a solid 98 Composite Rating from IBD.

Sohu.com also operates MMORPGs. It gets just over half its revenue from online gaming revenue. The games are developed and operated by Sohu.com's majority-owned subsidiary, Changyou.com (CYOU), which debuted on the Nasdaq in 2009.

The stock cleared a short cup base March 29. It's now 6% above the 90.58 buy point. Sohu.com carries a best-possible Composite Rating of 99.

The company announced Monday that it would report first-quarter results before the market opens April 25.

[eastunder]

Once again at resistance: Can SOHU move over that area?

[eastunder]

SOHU 1Q earnings 4-25-11 BMO

Sohu.com to Report First Quarter 2011 Financial Results on April 25, 2011

Monday , April 11, 2011 01:00ET

BEIJING, April 11, 2011 /PRNewswire-Asia/ -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, will report its first quarter 2011 unaudited financial results on Monday, April 25, 2011, before U.S. market hours.


Sohu's management team will host a conference call on the same day at 8:30 a.m. U.S. Eastern Time, April 25, 2011 (8:30 p.m. Beijing/Hong Kong time, April 25, 2011) following the quarterly results announcement.


The dial-in details for the live conference call are:



US Toll-Free: [phone]
International: [phone]
Hong Kong: [phone]
Passcode: SOHU




Please dial in 10 minutes before the call is scheduled to begin and provide the pass code to join the call.


A telephone replay of the call will be available after the conclusion of the conference call at 10:30 a.m. Eastern Time on April 25 through May 2, 2011. The dial-in details for the telephone replay are:



International: [phone]
Passcode: 4431372




The live webcast and archive of the conference call will be available on the Investor Relations section of Sohu's website at http://corp.sohu.com/.

[eastunder]

SOHU

[eastunder]

Sohu.com Inc. (SOHU) , the owner of China’s fourth-most visited website, surged 7.1 percent to a record $97.30. The company led gains among Chinese Internet shares traded in the U.S.

[eastunder]

SOHU

[eastunder]

SOHU: Q4 EPS $1.07 vs 76c Beats $1 Est; Guidance In-Line with Consensus

Monday , January 31, 2011 08:19ET

QUARTER RESULTS
Sohu.com Incorporated (SOHU) reported Q4 results ended December 2010. Q4 Revenues were $173.20M; +27.51% vs yr-ago; BEATING revenue consensus by +3.13%. Q4 EPS was $1.07; +40.79% vs yr-ago; BEATING earnings consensus by +7.00%.

Q4 RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 Revenues:       $173.20M      $135.83M     +27.51%      $167.94M      +3.13% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 EPS:               $1.07           76c     +40.79%         $1.00      +7.00% 
 ----------  ------------  ------------  ----------  ------------  ----------

YEAR-END RESULTS
Co. also reported Year-End results ended December 2010. FY Revenues were $612.78M; +18.93% vs yr-ago; BEATING revenue consensus by +1.08%. FY EPS was $3.62; +1.40% vs yr-ago; MISSING earnings consensus by -0.55%.

FY RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 Revenues:       $612.78M      $515.24M     +18.93%      $606.26M      +1.08% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 EPS:               $3.62         $3.57      +1.40%         $3.64      -0.55% 
 ----------  ------------  ------------  ----------  ------------  ----------

GUIDANCE

Q1-11 Revenue Outlook [$164.5 - $169.5M]: SOHU expects Q1 2011 revenues of $164.5 to $169.5 million. The Q1-11 revenue forecast is in-line with current consensus estimates.
Q1-11 Earnings Outlook [$1.03 - $1.08]: SOHU expects Q1 2011 adjusted EPS of $1.03 to $1.08. The Q1-11 earnings forecast is in-line with current consensus estimates.

[eastunder]

Sohu.com Reports Fourth Quarter and Fiscal Year 2010 Unaudited Financial Results

Monday , January 31, 2011 00:00ET



BEIJING, Jan. 31, 2011 /PRNewswire-Asia/ -- BEIJING, CHINA, January 31, 2011 - Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, today reported unaudited financial results for the fourth quarter and fiscal year ended December 31, 2010.




Fourth Quarter Highlights(1)


-- Record total revenues and record revenues in each of the Group's brand
advertising, online game and search businesses. All such operating
parameters exceeded the Group's expectations.
-- Total revenues were US$173.2 million, up 27% year-over-year and 6%
quarter-over-quarter.
-- Brand advertising revenues were US$60.1 million, up 31% year-over-year
and 2% quarter-over-quarter.
-- Online game revenues reached US$91.7 million, up 30% year-over-year and
7% quarter-over-quarter.
-- Search revenues were US$6.6 million, up 126% year-over-year and 23%
quarter-over-quarter.
-- After deducting the share of net income pertaining to the Noncontrolling
Interest, GAAP net income was US$41.5 million, up 41% year-over-year and
7% quarter-over-quarter, or US$1.07 per fully diluted share. Non-GAAP
net income was US$47.9 million, up 34% year-over-year and 6%
quarter-over-quarter, or US$1.23 per fully diluted share.


(1) Explanation of the Group's non-GAAP financial measures and related reconciliations to GAAP financial measures are included in the accompanying "Non-GAAP Disclosure" and the "Reconciliation to Unaudited Condensed Consolidated Statements of Operations."


Fiscal Year 2010 Highlights


-- Record total revenues and record revenues in each of the Group's brand
advertising, online game and search businesses.
-- Total revenues reached US$612.8 million, up 19% compared with 2009.
-- Brand advertising revenues were US$211.8 million, up 20% compared with
2009.
-- Online game revenues were US$327.1 million, up 22% compared with 2009.
-- Search revenues reached US$18.6 million, up 120% compared with 2009.
-- After deducting the share of net income pertaining to the Noncontrolling
Interest, GAAP net income was flat compared with 2009, reaching US$139.3
million, or US$3.62 per fully diluted share. Non-GAAP net income was up
6% compared with 2009, reaching US$164.3 million, or US$4.21 per fully
diluted share.
-- Cash balance was US$678.4 million as of December 31, 2010, representing
an increase of US$114.6 million from December 31, 2009.


Dr. Charles Zhang, Chairman and CEO of Sohu, commented, "While I am encouraged by these strong results across our multiple business lines, I am even more excited when we look beyond our financial performance. First, our conscientious efforts in online video and our strategy to secure high quality authorized content have brought our market share from 3.4% to 13.4% in a mere 12-month period. Second, while TLBB continues to be a strong and popular game, Changyou will unveil the full trial version of the highly anticipated Duke of Mount Deer to players once it officially kicks off the game's marketing campaign in March. And third, with its new capital structure in place, Sogou's business is quickly picking up momentum. Over the fourth quarter of 2010, active users of the Sogou browser, related search traffic and search revenue, all grew north of 20% quarter-to-quarter."


Commenting on Sohu's brand advertising business, Ms. Belinda Wang, Co-President and COO, added, "We achieved another record year in our brand advertising business. Brand advertising revenues for the fourth quarter rose 31% compared with the fourth quarter of 2009. We are optimistic that we will be able to attract attention from the top companies that are seeking effective and efficient marketing solutions for their 2011 plans. And with advertising revenue from online video for the year 2010 grew to three times that of 2009, we are convicted that this business has vast potential."


Fourth Quarter Financial Results


Revenues


Total revenues for the fourth quarter of 2010 were US$173.2 million, up 27% year-over-year and 6% quarter-over-quarter.


Brand advertising revenues for the fourth quarter of 2010 totaled US$60.1 million, up 31% year-over-year and 2% quarter-over-quarter.


Online game revenues for the fourth quarter of 2010 were US$91.7 million, up 30% year-over-year and 7% quarter-over-quarter.


Search revenues for the fourth quarter of 2010 were US$6.6 million, up 126% year-over-year and 23% quarter-over-quarter.


Wireless revenues for the fourth quarter of 2010 were US$14.4 million, down 8% year-over-year and up 6% quarter-over-quarter.


Gross Margin


Gross margin was 74% for the fourth quarter of 2010, compared with 74% in the third quarter of 2010 and 75% in the fourth quarter of 2009. Non-GAAP gross margin for the fourth quarter of 2010 was 75%, compared with 74% in the third quarter of 2010 and 75% in the fourth quarter of 2009.


Brand advertising gross margin for the fourth quarter of 2010 was 60%, compared with 61% in the third quarter of 2010 and 65% in the fourth quarter of 2009. Non-GAAP brand advertising gross margin for the fourth quarter of 2010 was 63%, compared with 62% in the third quarter of 2010 and 65% in the fourth quarter of 2009.


Both GAAP and non-GAAP gross margin for online games in the fourth quarter of 2010 were 90%, compared with 90% in the third quarter of 2010 and 92% in the fourth quarter of 2009. The decline in gross margin was mainly due to an increase in salaries and benefits and higher bandwidth and server depreciation costs associated with the operation of more games in the fourth quarter of 2010.


Both GAAP and non-GAAP gross margin for the search business in the fourth quarter of 2010 were 32%, compared with 32% in the third quarter of 2010 and 2% in the fourth quarter of 2009.


Both GAAP and non-GAAP gross margin for the wireless business for the fourth quarter of 2010 were 45%, compared with 46% in the third quarter of 2010 and 44% in the fourth quarter of 2009.


Operating Expenses


For the fourth quarter of 2010, Sohu's operating expenses totaled US$61.8 million, up 27% year-over-year and 11% quarter-over-quarter. Non-GAAP operating expenses totaled US$55.5 million, up 23% year-over-year and 11% quarter-over-quarter. The sequential increases in both GAAP and non-GAAP operating expenses were primarily attributable to the hiring of more game engineers and expenses related to royalties for licensed games in the fourth quarter of 2010.


Operating Margin


Operating margin was 38% for the fourth quarter of 2010, compared with 40% in the previous quarter and 39% in the fourth quarter of 2009. Non-GAAP operating margin was 43% for the fourth quarter of 2010, compared with 44% in the previous quarter and 42% in the fourth quarter of 2009.


Income Tax Expense


For the fourth quarter of 2010, excluding a non-cash income tax expense reversal of US$0.7 million recorded for tax benefits from share-based awards in connection with the recent U.S. Congress's enactment of legislation with favorable tax provisions that were reinstated retroactively to January 1, 2010, non-GAAP income tax expense was US$11.1 million, compared with US$10.6 million in the previous quarter.


Net Income


Before deducting the share of net income pertaining to the Noncontrolling Interest, GAAP net income for the fourth quarter of 2010 was US$57.4 million, up 35% year-over-year and 6% quarter-over-quarter. Non-GAAP net income for the fourth quarter of 2010 was US$64.6 million, up 28% year-over-year and 5% quarter-over-quarter, exceeding the high end of the Group's expectations.


After deducting the share of net income pertaining to the Noncontrolling Interest, GAAP net income for the fourth quarter of 2010 was US$41.5 million, or US$ 1.07 per fully diluted share. Non-GAAP net income for the fourth quarter of 2010 was US$47.9 million, or US$ 1.23 per fully diluted share, up 34% year-over-year and 6% quarter-over-quarter, exceeding the high end of the Group's expectations.


Cash Balance


Sohu Group continued to maintain a debt-free balance sheet and a strong cash position of US$678.4 million as of December 31, 2010.



Fiscal Year 2010 Financial Results


Revenues


Total revenues for fiscal year 2010 were US$612.8 million, up 19% compared with 2009.


Brand advertising revenues for fiscal year 2010 were US$211.8 million, up 20% compared with 2009.


Online game revenues for fiscal year 2010 were US$327.1 million, up 22% compared with 2009.


Search revenues for fiscal year 2010 were US$18.6 million, up 120% compared with 2009.


Wireless revenues for fiscal year 2010 were US$52.3 million, down 14% compared with 2009.


Gross Margin


Gross margin was 74% and non-GAAP gross margin was 75% for fiscal year 2010, compared with 76% for both GAAP and non-GAAP gross margin in 2009.


Brand advertising gross margin was 59% for fiscal year 2010, compared with 66% in 2009. Brand advertising non-GAAP gross margin was 61% for fiscal year 2010, compared with 67% in 2009.


Online game gross margin was 91% for fiscal year 2010, compared with 93% in 2009. Online game non-GAAP gross margin was 91% for fiscal year 2010, compared with 94% in 2009. The decline in gross margin was mainly due to an increase in salaries and benefits and higher bandwidth and server depreciation costs associated with the operation of more games in 2010.


Both GAAP and non-GAAP gross margin for the search business were 24% for fiscal year 2010, compared with -14% in 2009.


Both GAAP and non-GAAP gross margin for the wireless business were 46% for fiscal year 2010, compared with 43% in 2009.


Operating Expenses


For fiscal year 2010, Sohu's operating expenses totaled US$221.9 million, up 18% compared with 2009. Non-GAAP operating expenses increased 16% to US$199.4 million. The year-over-year increase primarily reflects an increase in salaries and compensation expenses as a result of increased headcount, an increase in content and bandwidth costs, as well as an increase in expenses related to royalties for licensed games at Changyou.


Operating Margin


Operating margin for fiscal year 2010 was 38%, compared with 40% in 2009. Non-GAAP operating margin was 42%, compared with 43% in 2009.


Income Tax Expense


For fiscal year 2010, excluding non-cash income tax expense of US$1.2 million recorded for the tax benefits from share-based awards, non-GAAP income tax expense was US$34.9 million, compared with US$29.8 million in the previous year.


Net Income


Before deducting the share of net income pertaining to the Noncontrolling Interest, GAAP net income for fiscal year 2010 was US$198.2 million, up 12% compared with 2009; non-GAAP net income for fiscal year 2010 was US$226.8 million, up 15% compared with 2009.


After deducting the share of net income pertaining to the Noncontrolling Interest, GAAP net income for fiscal year 2010 was US$139.3 million, or US$3.62 per fully diluted share. Non-GAAP net income for fiscal year 2010 was US$164.3 million, or US$4.21 per fully diluted share.


Ms. Carol Yu, Co-President and CFO of Sohu, commented, "While we are pleased with this set of record financial results for both the quarter and the year, we are even more upbeat about Sohu's bright future. Our past investments in both online video and search are starting to bear fruit and emerging to be new growth engines for our shareholders. "


Supplementary Information for Online Game Results


Fourth Quarter 2010 Operational Results


Aggregate registered accounts for Changyou's games (2) as of December 31, 2010 increased 6% quarter-over-quarter and 38% year-over-year to 111.4 million.


Aggregate peak concurrent users ("PCU") for Changyou's games increased 5% quarter-over-quarter and 7% year-over-year to 1,030,000.


Aggregate active paying accounts ("APA") for Changyou's games increased 3% quarter-over-quarter and 13% year-over-year to 2.7 million.


Average revenue per active paying account ("ARPU") for Changyou's games increased 2% quarter-over-quarter and 12% year-over-year to RMB219, which is consistent with Changyou's intention of having ARPU remain within a range that keeps Changyou's games affordable for the majority of game players in China.


(2) Comprises the following games operated in China: Tian Long Ba Bu ("TLBB"), Blade Online, Blade Hero 2, Da Hua Shui Hu, Zhong Hua Ying Xiong, Immortal Faith and San Jie Qi Yuan.


Fourth Quarter and Fiscal Year 2010 Revenues


Total revenues for the fourth quarter of 2010 increased 7% quarter-over-quarter and 30% year-over-year to US$91.7 million. Total revenues for the fiscal year 2010 were US$327.1 million, an increase of 22% from US$267.6 million in 2009.


Revenues from game operations for the fourth quarter of 2010 increased 7% quarter-over-quarter and 30% year-over-year to US$89.5 million. Revenues from game operations in 2010 were US$318.9 million, an increase of 23% from US$259.8 million in 2009. The increases for the fourth quarter and the full year were mainly due to the continued popularity of TLBB in China.


Overseas licensing revenues for the fourth quarter of 2010 were $2.2 million, an increase of 11% sequentially and 7% year-over-year. The increases for the fourth quarter were mainly due to increased momentum of TLBB in Vietnam and revenue contribution for a full quarter from the game in Thailand in the fourth quarter of 2010. Overseas licensing revenues in 2010 were US$8.2 million, an increase of 5% from US$7.8 million in 2009. The increases for the full year were largely due to increased momentum of TLBB in Vietnam and Malaysia.


Recent Business Developments


Open Beta Testing of San Jie Qi Yuan


On December 3, 2010, Changyou began open beta testing of San Jie Qi Yuan, a 2D turn-based cartoon-style massively multi-player online role-playing game. Adapted from one of the four great classical novels, Journey to the West, the game allows users to experience fast-paced martial arts combat in entertaining 2D graphics within a mythical fantasy world in ancient China. The game was licensed from a game studio in China and is operated by Changyou's wholly-owned subsidiary I.C.E. Entertainment Limited.


Changyou To Acquire Remaining Stake in Jing Mao


In January 2011, Changyou entered into a definitive agreement under which Changyou will acquire the remaining 50% of the equity in Shanghai Jing Mao Cultural Communications Ltd. and its affiliate ("Jing Mao"). Jing Mao is primarily engaged in cinema advertising in China. The purpose of the acquisition is to secure additional advertising resources for the promotion of Changyou's online games. Following the completion of the transaction, Changyou will hold 100% of the equity in Jing Mao. Jing Mao will be consolidated into Changyou's financial statements starting from February 1, 2011.


Business Outlook


For the first quarter of 2011, Sohu estimates:


-- Total revenues to be between $164.5 million and $169.5 million
-- Brand Advertising revenues to be between $55.0 million and $57.0
million. This implies a sequential decline of 5% to 8%, and 39% to 44%
year-over-year growth.
-- Total revenues from Changyou to be between US$92.0 million and US$95.0
million, of which revenues from online games, which are revenues
exclusive of revenues from Jing Mao, are expected to be between US$91.0
million and US$93.0 million.
-- Search revenues to be around $6.5 million.
-- Before deducting the share of non-GAAP net income pertaining to the
Noncontrolling Interest, Sohu estimates its pro forma non-GAAP net
income to be between $54.5 million and $57.0 million.
-- After deducting the share of non-GAAP net income pertaining to the
Noncontrolling Interest, Sohu estimates non-GAAP net income to be
between $40.0 million and $42.0 million and non-GAAP fully diluted
earnings per share to be between $1.03 and $1.08.
-- Assuming no new grants of share-based awards, Sohu estimates that
compensation expenses and income tax expenses relating to share-based
awards will be around $5.0 million to $6.0 million, which includes $1.5
million to $2.0 million for Changyou. Considering Sohu's shares in
Changyou, the estimated impact of this expense is expected to reduce
Sohu's fully diluted earnings per share for the first quarter of 2011,
under US GAAP, by 11 to 13 cents.


Non-GAAP Disclosure


To supplement the unaudited consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Sohu's management uses non-GAAP measures of cost of revenues, operating expenses, income tax expense, net income and net income per share, which are adjusted from results based on GAAP to exclude the impact of share-based awards granted to employees in the consolidated statements of operations, which consists mainly of share-based compensation expense and non-cash tax benefits from excess tax deductions related to share-based awards. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.


Sohu's management believes excluding the impact of share-based awards from its non-GAAP financial measure is useful for itself and investors. Further, the impact of share-based awards cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts, which have been the basis for information Sohu provides to analysts and investors as guidance for future operating performance. As the impact of share-based awards does not involve any upfront or subsequent cash outflow, Sohu does not factor this in when evaluating and approving expenditures or when determining the allocation of its resources to its business segments. As a result, in general, the monthly financial results for internal reporting and any performance measure for commissions and bonuses are based on non-GAAP financial measures that exclude the impact of share-based awards.


The non-GAAP financial measures are provided to enhance investors' overall understanding of Sohu's current financial performance and prospects for the future. A limitation of using non-GAAP cost of revenues, operating expenses, net income and net income per share, excluding the impact of share-based awards, is that the impact of share-based awards has been and will continue to be a significant recurring expense in Sohu's business for the foreseeable future. In order to mitigate these limitations Sohu has provided specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables include details on the reconciliation between the GAAP financial measures that are most directly comparable to the non-GAAP financial measures that have been presented.


Notes to Financial Information


Financial information in this press release other than the information indicated as being non-GAAP is derived from Sohu's unaudited interim financial statements prepared in accordance with GAAP.


On June 20, 2006, Sohu discontinued its own e-commerce platform of physical consumer goods. While processing the disposal of its e-commerce business, Sohu is reporting the related business activities as discontinued operations. Sohu's income statement separates out discontinued operations for both current and prior periods in order to focus on continuing operations and provide a consistent basis for comparing financial performance over time.


Financials continued at:

http://www.knobias.com/story.htm?eid=3.1.514af3f441c648cdc5eaf040263fea80d5a2116881764f2532a0e23bad7557e3

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SOHU 4q/full year earnings: 1-31-11 BMO

Sohu.com to Report Fourth Quarter and Fiscal 2010 Financial Results on January 31, 2011

Press Release Source: Sohu.com Inc. On Monday January 17, 2011, 12:00 am EST
BEIJING, Jan. 17, 2011 /PRNewswire-Asia/ -- Sohu.com Inc. (Nasdaq:SOHU - News), China's leading online media, communication, search, online game and wireless value-added services company, will report its fourth quarter and fiscal 2010 unaudited financial results on Monday, January 31, 2011, before U.S. market hours.

Sohu's management team will host a conference call on the same day at 8:30 a.m. U.S. Eastern Time, January 31, 2011 (9:30 p.m. Beijing/Hong Kong time, January 31, 2011) following the quarterly and fiscal year results announcement.

The dial-in details for the live conference call are:


US Toll-Free:
[phone]

International:
[phone]

Hong Kong:
[phone]

Passcode:
SOHU

Please dial in 10 minutes before the call is scheduled to begin and provide the pass code to join the call.

A telephone replay of the call will be available after the conclusion of the conference call at 10:30 a.m. Eastern Time on January 31 through February 8, 2011. The dial-in details for the telephone replay are:


International:
[phone]

Passcode:
4398395


The live webcast and archive of the conference call will be available on the Investor Relations section of Sohu's website at http://corp.sohu.com/.

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Gap filled 12 -16-10



Longterm chart: