Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Sohu Begins Open Beta
Zacks Equity Research, On Wednesday December 8, 2010, 4:00 pm EST
http://finance.yahoo.com/news/Sohu-Begins-Open-zacks-3944525384.html?x=0&.v=1
A leading online brand and Internet portal in China, Sohu.com Inc. (NasdaqGS: SOHU - News) announced that its subsidiary Changyou.com Ltd (NasdaqGS: CYOU - News) has begun open-beta testing of San Jie Qi Yuan, Changyou's second 2D turn-based cartoon-style, a massively multi-player online role-playing game (MMORPG) on December 3, 2010.
San Jie Qi Yuan was licensed from a game studio in China and is operated by Changyou's wholly-owned subsidiary, I.C.E. Entertainment, the company said.
The game enables gamers to experience fast-paced martial arts battle in entertaining 2D graphics amid a backdrop of mythical fantasy world in ancient China. Players can also enhance their virtual experiences by engaging in other fun activities such as gardening, home building or sharing stories with friends through the built-in chat function, the company highlighted.
The company reported an increase of 33.5% in gaming operation revenues from China and 7.8% hike in overseas licensing gaming revenues in 2009 versus 2008 despite the weak macro economic conditions worldwide.
According to China Internet Network Information Center (CNNIC), Analysys and IDC, 82% players prefer MMORPG game in China. MMORPG has grown at a rapid pace and revenues have witnessed a CAGR of 100% over the last five years. This represents a tremendous growth opportunity for Sohu.
Though cost-cutting by small game developers and delay in launch of new games could pose a challenge, we believe Sohu’s existing games along with the development of new games will boost growth beyond 2010.
Sohu is currently moving forward with its pipeline of new games for China, Japan, North America and other geographical regions.
IDC forecasts that China’s online gaming market will post a CAGR of 14.7% in the next five years and account for subscription revenues of RMB 50.8 billion ($7.5 billion) by 2014.
We remain encouraged by Sohu’s accelerating online game revenue growth, which escalated to $267.6 million in fiscal 2009 from $201.8 million in fiscal 2008, $42.1 million in fiscal 2007 and $8.5 million in fiscal 2006.
Additionally, Sohu’s focus on online games will position it well to compete with the larger players such as Shanda Interactive (NasdaqGS: SNDA - News) and SINA Corp. (NasdaqGS: SINA - News).
Sohu reported strong third quarter 2010 results with both revenues and earnings beating the Zacks Consensus Estimates, primarily driven by a growth in brand advertising, search ad business and online gaming.
Sohu provided an upbeat fourth quarter guidance that was above expectation. As a result, we have raised our 2010 and 2011 EPS estimates. The company is expected to benefit from its strength in online games, online video growth, promising games portfolio and China’s growing online advertising industry.
The company expects increased advertising spending in 2010. Although results improved, the company’s operating expenses have been steadily going up, which we fear could limit the earnings growth. Moreover, recent delays in game launch and intense competition could further pressure performance.
We believe Sohu is a 2011 growth story and advise investors to wait for a more favorable entry point. We maintain our long-term Neutral rating on the stock.
Because I was a wee bit busy elsewhere- I missed this:
SOHU: Raising Target - JAGNote by RBC Capital Markets
9:45 am ET 10/26/2010- JAG Media
SOHU: Raising Target - The firm has a Sector Perform rating and increased its price target on the shares from $53 to $67..
So - current target 67?
Somebody loves my SOHO, somebody loves my SOHU....
ME. :) LOL
;) A Piper. LOL So true.
Never know what the little devil might do. ;)
UPDATE 2-Sohu Q3 beats Street, shares hit year-high
* Q3 EPS $1.01 vs est. $0.90
* Sees Q4 non-GAAP EPS of $1.10-$1.15
* Sees Q4 revenue of $163 mln-$168 mln
* Shares up 14 percent (Recasts, adds share movement, analyst comments, details)
BANGALORE, Oct 25 (Reuters) - Sohu.com Inc's (SOHU.O) quarterly profits rose, beating Wall Street estimates, as its online games continued to be popular among the Internet portal's target audience, sending its shares to a year-high.
Shares of Sohu, which have gained nearly 50 percent of their value in the last three months, rose as much as 14 percent to $74.99 Monday on Nasdaq.
Total revenue for the company, which competes with Sina Corp (SINA.O), NetEase.com (NTES.O) and Tencent Holdings (0700.HK), rose 20 percent to $164.1 million, for the reported quarter, well above analysts' estimates of $156.7 million.
The key online gaming segment, which makes up more than half of Sohu's total revenue, rose 25 percent to $85.6 million, after having stabilised in the last quarter.
The increases were mainly due to the continued popularity of its Tian Long Ba Bu (TLBB), in China and higher spending from game players, the company said.
Average revenue per user for the games, climbed 16 percent sequentially and 13 percent year-over-year to 214 yuan.
The online gaming segment (ChangYou) has three more in-house games under development and they plan to launch one every quarter, Think Equity analyst Atul Bagga said.
"That should be incremental to their top and bottom-line." Brand advertising, Sohu's other main revenue source, jumped 22 percent to $59.1 million, as China's advertising market rebounded.
China's advertising market remained weak last year as companies slashed advertising and marketing budgets because of the financial crisis.
For the fourth quarter, Sohu said it expects non-GAAP earnings of $1.10-$1.15 a share, on revenue of $163-$168 million.
Analysts, on average, were expecting earnings of 95 cents a share, on revenue of $162.6 million.
The company expects brand advertising revenue to be between $58-$60 million, as it seeks to spend more in the recovering ad market. (Reporting by Mansi Dutta & Sakthi Prasad in Bangalore; Editing by Erica Billingham, Jarshad Kakkrakandy)
New...precious new like …Piper!.
Got to love that!
The MARKET is about the new…… SOHU
Sohu Jumps on Q3 Beat, Higher Q4 Forecast.
By Tiernan Ray
http://blogs.barrons.com/techtraderdaily/2010/10/25/sohu-jumps-on-q3-beat-higher-q4-forecast/?mod=yahoobarrons
Shares of Chinese Web portal Sohu.com (SOHU) are up $6.10, over 9%, at $71.86 after the company this morning comfortably beat Q3 earnings estimates and guided Q4 above estimates.
Q3 revenue was up 20%, year over year, at $164 million, versus $156.8 million expected, yielding profit per share of $1.16, versus 90 cents expected.
Brand advertising revenue was up 22%, while search revenue more than doubled, the company said. Online video is “gaining significant traction,” said CEO Charles Zhang, while online games had “solid results.” Games revenue was up 25% in the quarter.
For the current quarter, the company forecast revenue of $163 million to $168 million, versus $162.58 million expected; profit per share, excluding some costs, is projected at $1.10 to $1.15, versus the 95 cent average estimate.
And to think once upon a time she was just a little baby. ;)
Up 16% at lunch…Yumm-Yumm, must taste good, aye?
Congrats!
Q3 Adj EPS $1.16 vs 96c Beats 91c Est; Guidance In-Line with Consensus
Monday , October 25, 2010 08:35ET
QUARTER RESULTS
Sohu.com Incorporated (SOHU) reported Q3 results ended September 2010. Q3 Revenues were $164.10M; +20.14% vs yr-ago; BEATING revenue consensus by +5.25%. Q3 EPS was $1.01. Adjusted Q3 EPS was $1.16; +20.83% vs yr-ago; BEATING earnings consensus by +27.47%.
GUIDANCEQ3 RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: $164.10M $136.59M +20.14% $155.91M +5.25%
---------- ------------ ------------ ---------- ------------ ----------
EPS: $1.01 N/A N/A N/A N/A
Adj EPS: $1.16 96c +20.83% 91c +27.47%
---------- ------------ ------------ ---------- ------------ ----------
Sohu.com Reports Third Quarter 2010 Unaudited Financial Results
Monday , October 25, 2010 01:21ET
BEIJING, Oct. 25 /PRNewswire-Asia-FirstCall/ -- Sohu.com Inc. (Nasdaq: SOHU), China's leading online media, communications, search, online games and wireless value-added services group, today reported unaudited financial results for the third quarter ended September 30, 2010.
Third Quarter 2010 Highlights (1)
-- Record high total revenues and record high revenues for brand
advertising, search and online games. All such operating parameters
exceeded high end of Group guidance.
-- Total revenues were US$164.1 million, up 20% year-on-year, and 12%
quarter-over-quarter.
-- Brand advertising revenues were US$59.1 million, up 22% year-over-year
and 11% quarter-over-quarter.
-- Search revenues reached US$5.4 million, up 134% year-over-year and 38%
quarter-over-quarter.
-- Online game revenues reached US$85.6 million, up 25% year-over-year and
10% quarter-over-quarter.
-- Before deducting the share of net income pertaining to the
Non-Controlling Interest, GAAP net income for the third quarter of 2010
was US$54.0 million, up 15% year-over-year and 19% quarter-over-quarter.
Non-GAAP net income was US$61.3 million, up 19 % year-over-year and up
17% quarter-over-quarter, exceeding high end of Group guidance.
-- After deducting the share of net income pertaining to the
Non-Controlling Interest, GAAP net income was US$38.7 million, up 12%
year-over-year and 24% quarter-over-quarter, or US$1.01 per fully
diluted share, and non-GAAP net income was US$45.2 million, up 21%
year-over-year and quarter-over-quarter, or US$ 1.16 per fully diluted
share, exceeding high end of Group guidance.
Dr. Charles Zhang, Chairman and CEO of Sohu.com, commented, "I'm pleased to report that we had a record quarter, with strong growth in each of our major business segments. Online video, our potential future revenue driver, is gaining significant traction as we add high-definition content and leverage the synergies of the Sohu platform to make our video products even more attractive to both users and advertisers. Also we believed that the introduction of strategic investors to our Sogou search business leaves our search business in a more competitive position and offers great promise for future collaboration and services with China's largest e-commerce website."
"Our largest business segment, online games, powered by the successful release of new expansion packs for our proprietary flagship product and the launch of new licensed games, once again achieved solid results. The results also demonstrated the merits of using feedback to direct research and development efforts in our games. We continue to invest in employee recruitment and training. We are positive on the outlook of the industry and look to bring more proprietary games to market with an expanded team of talented engineers."
Commenting on Sohu's brand advertising business, Ms. Belinda Wang, Co-President and COO, said, "Our brand advertising business also set new records in the third quarter. Our expanding group of advertising partners is taking advantage of strong economic conditions in China along with particular strength in each of their end markets. More specifically, they are looking to us to help maximize their advertising spending based on our significant investments in our online platform and other value-added solutions.
Third Quarter Financial Results
Revenues
Total revenues for the third quarter ended September 30, 2010 were US$164.1 million, up 20% year-over-year and 12% quarter-over-quarter.
Brand advertising revenues for the third quarter of 2010 totaled a record high of US$59.1 million, up 22% year-over-year and 11% quarter-over-quarter.
Search revenues for the third quarter of 2010 were US$5.4 million, up 134% year-over-year and 38% quarter-over-quarter.
Online game revenues for the third quarter of 2010 were US$85.6 million, up 25% year-over-year and 10% quarter-over-quarter.
Wireless revenues for the third quarter of 2010 were US$13.6 million, down 19% year-over-year and up 23% quarter-over-quarter.
Gross Margin
Gross margin was 74% for the third quarter of 2010, compared with 73% in the second quarter of 2010 and 76% in the third quarter of 2009. Non-GAAP gross margin for the third quarter of 2010 was 74%, compared with 74% in the second quarter of 2010 and 76% in the third quarter of 2009.
Brand advertising gross margin for the third quarter of 2010 was 61%, compared with 58% in the second quarter of 2010 and 68% in the third quarter of 2009. Non-GAAP brand advertising gross margin for the third quarter of 2010 was 62 %, compared with 60% in the second quarter of 2010 and 69% in the third quarter of 2009.
Online game gross margin for the third quarter of 2010 was 90%, compared with 91% in the second quarter of 2010 and 93% in the third quarter of 2009. Non-GAAP online game gross margin for the third quarter of 2010 was 90%, compared with 91% in the second quarter of 2010 and 93% in the third quarter of 2009.
Wireless gross margin for the third quarter of 2010 was 46%, compared with 48% in the second quarter of 2010 and 43% in the third quarter of 2009. Non-GAAP wireless gross margin for the third quarter of 2010 was 46%, compared with 48% in the second quarter of 2010 and 43% in the third quarter of 2009.
Operating Expenses
For the third quarter of 2010, Sohu's operating expenses totaled US$55.6 million. Non-GAAP operating expenses totaled US$50.1 million, down 1% sequentially from US$50.8 million and up 7% year-over-year.
Operating Margin
Operating margin was 40% for the third quarter of 2010, compared with 35% in the second quarter of 2010 and 39% in the third quarter of 2009. Non-GAAP operating margin was 44% for the third quarter of 2010, compared with 39% in the previous quarter and 42% in the third quarter of 2009.
Income Tax Expense
For the third quarter of 2010, excluding non-cash income tax expense of US$0.7 million recorded for tax benefits from share-based awards, non-GAAP income tax expense was US$10.6 million, compared with US$5.7 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 third quarter of 2010 was US$54.0 million, up 15% year-over-year and 19% quarter-over-quarter. Non-GAAP net income for the third quarter of 2010 was US$61.3 million, up 19% year-over-year and 17% quarter-over-quarter, exceeding Group guidance by US$4.8 million.
After deducting the share of net income pertaining to the Non-Controlling Interest, GAAP net income for the third quarter of 2010 was US$38.7 million, or US$1.01 per fully diluted share. Non-GAAP net income for the third quarter of 2010 was US$45.2 million, or US$1.16 per fully diluted share, an increase of 21% quarter-over-quarter, exceeding Group guidance.
Cash Balance
Sohu group continued to maintain a debt-free balance sheet and a strong cash position of US$534.7 million as of September 30, 2010.
Ms. Carol Yu, Co-President and CFO of Sohu, commented, "We achieved a strong third quarter with record revenues in each of our major business categories, and strong growth in our operations. The strategic investment from Alibaba gives our search business a great opportunity to compete and capture market share. The financing proceeds would fund the future development of Sogou business. And Sohu Group's healthy operating cash flows, strong balance sheet, and growing platform point the way for us to further expand and deliver long-term value to our shareholders."
Supplementary Information for Online Game Business
Operational Results
Aggregate registered accounts for Changyou's games(2) as of September 30, 2010 increased 7% quarter-over-quarter and 40% year-over-year to 105.2 million.
Aggregate peak concurrent users ("PCU") for Changyou's games was approximately 980,000, a decrease of 14% quarter-over-quarter and an increase of 14% year-over-year.
Aggregate active paying accounts ("APA") for Changyou's games was approximately 2.61 million, a decrease of 6% quarter-over-quarter and an increase of 9% year-over-year.
ARPU for Changyou's games increased 16% quarter-over-quarter and 13% year-over-year to RMB214, which is consistent with Changyou's intention to have ARPU within a range that keeps Changyou's games affordable for the majority of game players in China.
Revenues
Total revenues for the third quarter of 2010 increased 10% quarter-over-quarter and 25% year-over-year to US$85.6 million.
Revenues from game operations for the third quarter of 2010 increased 11% quarter-over-quarter and 25% year-over-year to US$83.6 million. The increases were mainly due to the continued popularity of TLBB, in China and higher spending from game players.
Overseas licensing revenues for the third quarter of 2010 decreased 7% quarter-over-quarter and increased 11% year-over-year to US$2.0 million. The sequential decrease was mainly the result of greater competition in mature online game markets abroad. The year-over-year increase was largely due to increased momentum of TLBB in Vietnam and Malaysia.
Recent Business Developments
Closing of Minority Strategic Investment in Sogou
On October 22, 2010, Sohu's online search subsidiary Sogou Inc. completed the sale of newly-issued Series A Preferred Shares to Alibaba Investment Limited, a private investment subsidiary of Alibaba Group Holding Limited, China Web Search (HK) Limited, an investment vehicle of Yunfeng Fund, LP, and Photon Group Limited, the investment fund of Sohu's Chairman and Chief Executive Officer Dr. Charles Zhang, for $15 million, $9 million, and $24 million, respectively, that represent approximately 10%, 6% and 16%, respectively, of the outstanding share capital of Sogou on a fully-diluted basis. Sohu and Sogou have established a share incentive program for Sogou management and key employees as well as certain members of Sohu's executive management. Sohu will retain approximately 53% of Sogou on a fully-diluted basis, and intends in any event to retain a majority of the outstanding share capital of Sogou on a fully-diluted basis.
Open Beta Testing of Immortal Faith
On September 9, 2010, Changyou began open beta testing of Immortal Faith, Changyou's first 2D mythical massively multi-player online role-playing game ("MMORPG"). Set against a backdrop of a number of ancient Chinese myths and folk tales, the game allows players to battle demons and assist deities in the conquest of various fairy kingdoms found in Chinese mythology. The game allows users to experience the life journey of becoming immortal by participating in the specially designed fighting modes and utilizing the game's featured dynamic fighting moves.
Business Outlook
For the fourth quarter of 2010, Sohu estimates:
-- Total revenues to be between US$163 million and US$168 million, with
advertising revenues of US$64 million to US$66 million.
-- Brand advertising revenues to be between US$58 million and US$60
million.
-- Online game revenues to be between US$86 million and US$89 million.
-- Non-GAAP net income before deducting the share of non-GAAP net income
pertaining to the Non-Controlling Interest to be between US$59 million
and US$61.5 million.
-- Non-GAAP net income after deducting the share of non-GAAP net income
pertaining to the Non-Controlling Interest to be between US$43 million
and US$45 million
-- Non-GAAP fully diluted earnings per share to be between US$1.10 and
US$1.15.
-- Compensation expense and income tax expense related to share-based
awards, assuming no new grants of share-based awards, to be between
US$7.5 million and US$8.5 million, which includes Changyou's share-based
compensation expense for the fourth quarter of 2010, which is expected
to be between US$1.5 million and US$2.0 million. Considering Sohu's
share in Changyou, the estimated impact of this expense under US GAAP is
expected to reduce Sohu's fully diluted earnings per share for the
fourth quarter of 2010 by 19 US cents to 22 US cents.
Financials continued at : http://www.knobias.com/story.htm?eid=3.1.9995babefb457890b7c1c13ad2d016ce2720b4ff352872cb979806804b64ad48
Earnings Preview: Sohu.com
Zacks Equity Research, On Friday October 22, 2010, 5:20 pm EDT
http://finance.yahoo.com/news/Earnings-Preview-zacks-2946194253.html?x=0&.v=1
A leading online brand and Internet portal in China, Sohu.com Inc. (NasdaqGS: SOHU - News) is set to release its third quarter 2010 results on October 25, 2010, before the U.S. market opens.
Outlook
During the second quarter earnings call, Sohu provided guidance for the third quarter 2010. For the third quarter, management expects total revenue in the range of $153.0 million to $158.0 million.The Zacks Consensus Estimate for total revenue is $157.0 million, in line with management’s expectation.
Sohu projects advertising revenues to be in the range of $61.0 million to $63.0 million. The company expects the growth in revenues to come from World Cup, Shanghai Expo and Asian Games as well asfrom online video growth.
Brand advertising revenues are estimated to be in the range of $57.0 million to $59.0 million, implying an 8% to 11% sequential growth and 16% to 20% year-over-year growth. Online game revenues are expected to be in the range of $80.0 million to $83.0 million.
Sohu projects net income on a non-GAAP basis after deducting the non-controlling interest in Changyou to be in the range of $39.0 million to $41.0 million and earnings in the range of $1.00 to $1.05.
The Zacks Consensus Estimate for earnings per share is 90 cents for the third quarter and $3.53 for full year 2010.
Second Quarter Highlights
Second quarter earnings, including stock-based compensation expense increased 3.8% year over year to 82 cents per share, beating the Zacks Consensus Estimate of 80 cents by 2 cents. Earnings excluded Sohu’s non-controlling interest in the online gaming company Changyou.
Total revenue was up 15.0% year over year and 13.0% sequentially to $146.1 million in the second quarter of 2010, and was well above the Zacks Consensus Estimate of $143.0 million. This increase was primarily driven by a strong growth in brand advertising and online gaming revenues, which fully offset the weakness in wireless revenues.
We are encouraged by the company’s growing cash balance as well as its debt free balance sheet. At the end of second quarter 2010, Sohu had $599.1 million in cash and cash equivalents.
Our Take
Sohu is expected to benefit from its strength in online games and China’s growing online advertising industry. The company expects increased advertising spending in 2010 with the World Cup, World Expo and Asian games. Moreover, online video growth, which is expected to triple from the last year, will drive sales.
Although results improved, the company’s operating expenses have been steadily going up, which we apprehend could limit the earnings growth. Moreover, recent delays in game launch (Duke of Mount Deer) and intense competition could further pressure performance.
Analysts’ estimates for the third quarter and full year 2010 increased, in the last 30 days. Overall, 1 of the 15 analysts covering the stock has raised the estimate for the third quarter while 2 have made an upward revision to their estimates for full year 2010. There were no downward revisions.
Third quarter EPS estimate rose by 1 cent while full year 2010 EPS estimate was up by 4 cents. Given the positive revision to the estimates, the stock is currently a Zacks #2 Rank, a short-term Buy rating.
We expect the company to meet the Zacks Consensus Estimate for 2010 but advise investors to wait for a more favorable entry point. We believe Sohu is a 2011 growth story. We therefore maintain our Neutral rating on the stock over the long term.
SOHU.COM INC (SOHU): Read the Full Research Report
SOHU 3Q earnings 10-25-10 BMO
Sohu.com to Report Third Quarter 2010 Financial Results on October 25, 2010
Monday , October 11, 2010 05:30ET
BEIJING, Oct. 11 /PRNewswire-Asia/ -- Sohu.com Inc. (Nasdaq: SOHU), China's leading online media, communication, search, online game and wireless value-added services company, will report its third quarter 2010 unaudited financial results on Monday, October 25, 2010, 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 25, 2010 (8:30 p.m. Beijing/Hong Kong time, October 25, 2010) following the quarterly results announcement.
The dial-in details for the live conference call are:
US Toll-Free: +1-877-941-2927
International: +1-480-629-9722
Hong Kong: +852-3009-5027
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 11:00 a.m. Eastern Time on October 25 through November 8, 2010. The dial-in details for the telephone replay are:
International: +852-3056-2777
Passcode: 4374336
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/ .
Sohu.com Announces Open Beta Testing of "Immortal Faith" by Changyou.com on September 9, 2010
Thursday , September 09, 2010 05:00ET
BEIJING, Sept. 9 /PRNewswire-Asia/ -- Sohu.com Inc. (Nasdaq: SOHU), China's leading online media, communications, search, online games and wireless value-added services group, today announced that its massively multi-player online role-playing game ("MMORPG") subsidiary, Changyou.com Limited ("Changyou") (Nasdaq: CYOU), will begin open-beta testing of Immortal Faith, Changyou's first 2D martial arts massively multi-player online role-playing game ("MMORPG"), on September 9, 2010.
Immortal Faith is a game licensed from a local game studio in China. Set against a backdrop of a number of ancient Chinese myths and folk tales, the game allows players to battle demons and assist deities in the conquest of various fairy kingdoms found in Chinese mythology. By participating in the specially designed fighting modes and utilizing the game's featured dynamic fighting moves, the game lets users experience the life journey of becoming immortal.
Mr. Dewen Chen, President and Chief Operating Officer of Changyou, commented, "The open beta launch of Immortal Faith brings Changyou into the 2D mythical MMORPG segment, and furthers our product diversification efforts. Packed with attractive graphics showcasing different cultural elements from ancient China, the game contains many creative forms of combat aimed at attracting a new group of players to further expand our user base."
About Changyou
Changyou.com Limited's massively multi-player online role-playing games ("MMORPG") business began operations as a business unit within Sohu.com Inc. (NASDAQ: SOHU) in 2003. Changyou, a leading developer and operator of online games in China, was carved out as a separate, stand-alone company in December 2007, and completed an initial public offering on April 7, 2009. Changyou currently operates six online games, including the in-house developed Tian Long Ba Bu, one of the most popular online games in China, and the licensed Blade Online, Blade Hero 2, Da Hua Shui Hu, Zhong Hua Ying Xiong and Immortal Faith. Changyou has a diversified pipeline of games with various graphic styles and themes, including the licensed Legend of the Ancient World, and the in-house developed Duke of Mount Deer, which received an award as one of China's most anticipated online games. Changyou's advanced technology platform includes advanced 2.5D and 3D graphics engines, a uniform game development platform, effective anti-cheating and anti-hacking technologies, proprietary cross-networking technology and advanced data protection technology. For more information about Changyou, please visit http://www.changyou.com/en/.
About Sohu.com
Sohu.com Inc. (NASDAQ: SOHU) is China's premier online brand and indispensable to the daily life of millions of Chinese, providing a network of web properties and community based/web 2.0 products which offer the vast Sohu user community a broad array of choices regarding information, entertainment and communication. Sohu has built one of the most comprehensive matrices of Chinese language web properties and proprietary search engines, consisting of the mass portal and leading online media destination www.sohu.com; interactive search engine www.sogou.com; #1 games information portal www.17173.com; the top real estate website www.focus.cn; #1 online alumni club www.chinaren.com; wireless value-added services provider www.goodfeel.com.cn; leading online mapping service provider www.go2map.com; and developer and operator of online games www.changyou.com.
Meet the Cash Kings of Chinese Internet
By Jim Royal
September 3, 2010
As an investor, it pays to follow the cash. If you figure out how a company moves its money, you might eventually find some of that cash flowing into your pockets.
In this series, we'll highlight three big dogs in an industry, and compare their "cash king margins" over time, trying to determine which has the greatest likelihood of putting cash back in your pocket. After all, a company can pay dividends and buy back stock only after it's actually received cash -- not just when it books those accounting figments known as "profits."
The cash king margin
Looking at a company's cash flow statement can help you determine whether its free cash flow actually backs up its reported profit. Companies that can create 10% or more free cash flow from their revenue can be powerful compounding machines for your portfolio.
To find the cash king margin, divide the free cash flow from the cash flow statement by sales:
Cash king margin = Free cash flow / sales
Let's take Nike as an example. Over the past four quarters, the footwear giant generated $3.2 billion in operating cash flow. It invested about $335 million in property, plant, and equipment. To calculate free cash flow, subtract Nike's investment ($335 million) from its operating cash flow ($3.2 billion). That leaves us with $2.8 billion in free cash flow, which the company can save for future expenditures or distribute to shareholders.
Taking Nike's sales of $19 billion over the same period, we can figure that the company has a cash king margin of about 15% -- a nice high number. In other words, for every dollar of sales, Nike produces $0.15 in free cash.
Ideally, we'd like to see the cash king margin top 10%. The best blue chips can notch numbers greater than 20%, making them true cash dynamos. But some businesses, including many types of retailing, just can't sustain such margins.
We're also looking for companies that can consistently increase their margins over time, which indicates that their competitive position is improving. Erratic swings in margins could signal a deteriorating business, or perhaps some financial skullduggery; you'll have to dig deeper to discover the reason.
Three companies
Today, let's look at three companies in the Internet information industry:
Company Cash King Margin 2009 2008 2007 2006
Baidu 42.3% 41.5% 20.9% 37.6%
Sina 26.0% 25.8% 31.2% 23.0%
Sohu 30.3% 44.7% 20.0% 19.0%
I need some help. This stock trades in a very unusual way. For a $47 stock trading a halh million shares a day, how come...
1. The bid is almost always much lower from the most
recent sold price compared to the ask price?
2. The ask price goes below the most recent sold
price over 30 times a day, every day.
3. The varience between the the bid and ask price is
often times 8 cents to 10 cents. No other stock
selling at $47/half million/day does that.
Please take some time to watch the trading of SOHU yourself and let me know what you think. Is this as serious as I'm thinking it is? Thank you
UPDATE 1-Sohu sells Sogou stakes to Alibaba and funds
6:31 am ET 08/09/2010- Reuters
* Investors include Alibaba and two funds
* Sohu to retain 68 percent of Sogou (Adds details, background)
BEIJING, Aug 9 (Reuters) - Sohu.com Inc <SOHU.O>, China's No.2 Internet portal, said on Monday that it will sell 32 percent of its Sogou search engine to investors, including top Chinese e-commerce company Alibaba Group.
Sohu would sell 16 percent to Alibaba Group, parent of Hong Kong-listed Alibaba.com <1688.HK> and Yunfeng fund, co-founded by Alibaba Chairman Jack Ma, and another 16 percent to a fund invested by Sohu Chairman Charles Zhang, the companies said in a statement.
Sohu would hold the remaining 68 percent of Sogou, it said.
Financial details of the transaction were not provided.
Sohu had big hopes for its wholly-owned Sogou when it launched the search engine, but it has failed to gain much ground against Baidu <BIDU.O> and Google Inc <GOOG.O> during the past few years. But an alliance with Alibaba could help its prospects, as Alibaba currently prohibits Baidu from cataloging material from its e-commerce pages in its search results.
Wang Xiaochuan, Sohu's chief technology officer, would serve as chief executive officer of Sogou, the company said. (Reporting by Huang Yuntao and Doug Young; Editing by Chris Lewis)
SOHU: Q2 Adj EPS 86c vs 90c Beats 77c Est; Guidance Varies from Consensus
Monday , July 26, 2010 09:13ET
QUARTER RESULTS
Sohu.com Incorporated (SOHU) reported Q2 results ended June 2010. Q2 Revenues were $146.10M; +14.96% vs yr-ago; BEATING revenue consensus by +2.39%. Q2 EPS was 73c. Adjusted Q2 EPS was 86c; -4.44% vs yr-ago; BEATING earnings consensus by +11.69%.
GUIDANCEQ2 RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: $146.10M $127.09M +14.96% $142.69M +2.39%
---------- ------------ ------------ ---------- ------------ ----------
EPS: 73c N/A N/A N/A N/A
Adj EPS: 86c 90c -4.44% 77c +11.69%
---------- ------------ ------------ ---------- ------------ ----------
Sohu.com Reports Second Quarter 2010 Unaudited Financial Results
Monday , July 26, 2010 02:30ET
BEIJING, July 26 /PRNewswire-Asia/ -- Sohu.com Inc. (Nasdaq: SOHU), China's leading online media, communications, search, online games and wireless value-added services group, today reported unaudited financial results for the second quarter ended June 30, 2010.
Second Quarter 2010 Highlights(1)
-- Record high total revenues and record high revenues for brand
advertising and online games. All such operating parameters exceeded
Group guidance.
-- Brand advertising revenues were US$53.2 million, up 22% year-over-year,
exceeding high end of Group guidance.
-- Online game revenues reached US$77.7 million, up 17% year-over-year and
8% quarter-over-quarter, exceeding high end of Group guidance.
-- Before deducting the share of net income pertaining to the Non-
Controlling Interest, GAAP net income for the second quarter of 2010
was US$45.5 million, up 7% year-over-year and 10% quarter-over-quarter,
and non-GAAP net income for the second quarter of 2010 was US$52.5
million, up 7% year-over-year and up 9% quarter-over-quarter, exceeding
high end of Group guidance.
-- After deducting the share of net income pertaining to the Non-
Controlling Interest, GAAP net income for the second quarter of 2010
was US$31.3 million, or 82 US cents per fully diluted share, and non-
GAAP net income for the second quarter of 2010 was US$37.5 million, or
96 US cents per fully diluted share, exceeding high end of Group
guidance.
(1) Explanation of the Group' 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.com, commented, "Our results for the second quarter of 2010 surpassed our expectations as we established record total revenues and set new highs in our brand advertising and online game businesses. For our brand advertising business, we continue to place emphasis on online video and are convinced this will be an area of significant future growth. We have successfully expanded and diversified our collection of licensed and in-house produced quality video content, and develop innovative applications that cater to various devices, including the most sought after iPad. We are very encouraged by the fast-growing user base and new advertisers. For our online game business, Changyou demonstrated that the ongoing strategic release of feedback-driven content and a diverse portfolio of games are helping retain existing users, attract new ones, and reinforce the popularity of our games. We are optimistic about our ability to build on our momentum this year and add value over the long term.
Commenting on Sohu's brand advertising business, Ms. Belinda Wang, Co- President and COO, added, "Our brand advertising business performed well in the second quarter. The World Expo and World Cup clearly drove our strong performance. These events also enabled us to build stronger relationships with a growing roster of advertisers. Our investments in online video also led to encouraging increases in revenue in this area. As a result, we are starting to gain significant and sustained traction as we increasingly provide higher value advertising solutions to our advertising partners around China."
Second Quarter Financial Results
Revenues
Total revenues for the second quarter ended June 30, 2010 were US$146.1 million, up 15% year-over-year and 13% quarter-over-quarter.
Brand advertising revenues for the second quarter of 2010 totaled US$53.2 million, up 22% year-over-year and 35% quarter-over-quarter.
Online game revenues for the second quarter of 2010 were US$77.7 million, up 17% year-over-year and 8% quarter-over-quarter.
Wireless revenues for the second quarter of 2010 were US$11.1 million, down 26% year-over-year and 17% quarter-over-quarter.
Gross Margin
Gross margin was 73% for the second quarter of 2010, compared with 75% in the first quarter of 2010 and 77% in the second quarter of 2009. Non-GAAP gross margin for the second quarter of 2010 was 74%, compared with 75% in the first quarter of 2010 and 78% in the second quarter of 2009.
Brand advertising gross margin for the second quarter of 2010 was 58%, compared with 56% in the first quarter of 2010 and 68% in the second quarter of 2009. Non-GAAP brand advertising gross margin for the second quarter of 2010 was 60 %, compared with 59% in the first quarter of 2010 and 68% in the second quarter of 2009.
Online game gross margin for the second quarter of 2010 was 91%, compared with 93% in the first quarter of 2010 and 94% in the second quarter of 2009. Non-GAAP online game gross margin for the second quarter of 2010 was also 91%, compared with 93% in the first quarter of 2010 and 94% in the second quarter of 2009.
Wireless gross margin for the second quarter of 2010 was 48%, compared with 48% in the first quarter of 2010 and 45% in the second quarter of 2009. Non-GAAP wireless gross margin for the second quarter of 2010 was 48%, compared with 48% in the first quarter of 2010 and 45% in the second quarter of 2009.
Operating Expenses
For the second quarter of 2010, Sohu's operating expenses totaled US$56.0 million. Non-GAAP operating expenses totaled US$50.8 million, up 18% sequentially from US$43.0 million and up 17% year-over-year. The year-over- year increase primarily reflects an increase in marketing expenses.
Operating Margin
Operating margin was 35% for the second quarter of 2010, compared with 37% in the first quarter of 2010 and 38% in the second quarter of 2009. Non-GAAP operating margin was 39% for the second quarter of 2010, compared with 42% in the previous quarter and 43% in the second quarter of 2009.
Income Tax Expense
For the second quarter of 2010, excluding non-cash income tax expense of US$0.6 million recorded for tax benefits from share-based awards, non-GAAP income tax expense was US$5.7 million, compared with US$7.4 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 2010 was US$45.5 million, up 7% year-over-year and 10% quarter-over-quarter. Non-GAAP net income for the second quarter of 2010 was US$52.5 million, up 7% year-over-year and 9% quarter-over-quarter, exceeding Group guidance by US$2 million.
After deducting the share of net income pertaining to the Non-Controlling Interest, GAAP net income for the second quarter of 2010 was US$31.3 million, or 82 US cents per fully diluted share. Non-GAAP net income for the second quarter of 2010 was US$37.5 million, or 96 US cents per fully diluted share, an increase of 11% quarter-over-quarter, exceeding Group guidance.
Cash Balance
Sohu group continued to maintain a debt-free balance sheet and a strong cash position of US$599.1 million as of June 30, 2010.
Ms. Carol Yu, Co-President and CFO of Sohu, commented, "We had a solid quarter as both our core businesses reported record revenues with strong growth. With our debt-free balance sheet, strong cash flows, and robust platform, we believe we are particularly well positioned to further expand and deliver long-term value to our shareholders."
Business Outlook
Sohu estimates total revenues for the third quarter of 2010 to be between US$153.0 million and US$158.0 million, with advertising revenues of US$61.0 million to US$63.0 million.
Sohu estimates brand advertising revenues for the third quarter of 2010 to be between US$57.0 million and US$59.0 million.
Sohu estimates online game revenues for the third quarter of 2010 to be between US$80.0 million and US$83.0 million.
Sohu estimates non-GAAP net income for the third quarter of 2010, before deducting the share of non-GAAP net income pertaining to the Non-Controlling Interest, to be between US$54.0 million to US$56.5 million. After deducting the share of non-GAAP net income pertaining to the Non-Controlling Interest, Sohu estimates non-GAAP net income for the third quarter of 2010 to be between US$39.0 million to US$41.0 million, and non-GAAP fully diluted earnings per share for the third quarter of 2010 to be between US$1.00 and US$1.05.
Assuming no new grants of share-based awards, Sohu estimates compensation expense and income tax expense related to share-based awards for the third quarter of 2010 to be between US$6.5 million and US$7.5 million, which includes Changyou's share-based compensation expense for the third quarter of 2010 estimated to be between US$1.5 million and US$2.0 million. Considering Sohu's share in Changyou, the estimated impact of this expense under US GAAP is expected to reduce Sohu's fully diluted earnings per share for the third quarter of 2010 by 16 US cents to 18 US cents.
Supplementary Information for Online Game Business
Operational Results
Aggregate registered accounts for Changyou's games(2) grew 12% quarter- over-quarter and 42% year-over-year to 98.2 million.
Changyou has adopted a new method for reporting aggregate peak concurrent users ("PCU") for Changyou's games. Aggregate PCU for Changyou's games determined under the previous method rose 23% quarter-over-quarter and 35% year-over-year to approximately 1.28 million. Aggregate PCU for Changyou's games determined under the new method rose 25% quarter-over-quarter and 21% year-over-year to approximately 1.14 million. Under the previous method, aggregate PCU for a quarter was determined by adding up the separate PCUs for each of Changyou's games for the quarter. Under the new method, the aggregate PCU reported by Changyou for its games will be the highest aggregate PCU of the games for a day that occurs during the quarter. We believe that the new method will provide investors with a better foundation for understanding the performance of our online game business on a comparative quarter-over-quarter and year-over-year basis. In this release, we are providing quarter-over- quarter and year-over-year comparisons using both methods in order to facilitate investors' understanding as Changyou transitions from the previous method to the new method. Going forward, we plan to only report aggregate PCU for Changyou's games determined under the new method.
Aggregate active paying accounts ("APA") for Changyou's games grew 17% quarter-over-quarter and 17% year-over-year to approximately 2.79 million.
Average revenue per active paying account ("ARPU") for Changyou's games was RMB184 for the quarter, a decline of 8% quarter-over-quarter and 1% year- over-year, 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) Comprising Tian Long Ba Bu, Blade Online, Blade Hero 2, Da Hua Shui Hu,
and Zhong Hua Ying Xiong.
Revenues
Total online game revenues for the second quarter of 2010 increased 8% quarter-over-quarter and 17% year-over-year to US$77.7 million.
Revenues from game operations for the second quarter of 2010 increased 8% quarter-over-quarter and 16% year-over-year to US$75.6 million. The increases were mainly due to the ongoing popularity of TLBB, Changyou's flagship game.
Overseas licensing revenues for the second quarter of 2010 increased 15% quarter-over-quarter and 29% year-over-year to US$2.1 million. The increases were largely the result of increased momentum of TLBB in Vietnam and Malaysia.
Recent Business Developments
Open Beta Testing of Zhong Hua Ying Xiong
On May 20, 2010, Changyou began open beta testing of Zhong Hua Ying Xiong, Changyou's first 3D martial arts-themed massively multi-player online role- playing game ("MMORPG"). This licensed game is based on a popular Hong Kong comic book of the same name. The game features advanced 3D graphics, cinematic cutscenes, and dynamic real-time fighting movements that are designed to attract 3D online game enthusiasts.
Acquisition of I.C.E. Entertainment
In May 2010, Changyou completed the acquisition of I.C.E Entertainment Limited, a Shanghai-based online game developer and operator. The acquisition adds over 140 game engineers and game operation professionals to Changyou's platform.
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 on 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 have 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 extracted from Sohu's unaudited interim financial statements prepared in accordance with GAAP.
Financials continued at:
http://www.knobias.com/story.htm?eid=3.1.f7453775d6f8e0e903b5228abf529de115a4db8ff7367131d905134edf80fe82
CONSENSUS ESTIMATES:
SOHU: To Release Q2 Results Jul 26 [BMO]
Friday , July 23, 2010 13:00ET
Sohu.com Incorporated (Nasdaq NM: SOHU) is scheduled to release its Q2 financial results on July 26, 2010, before the market opens (BMO).
CONSENSUS ESTIMATES:
Q2 Revenue: $142.69 million
Q2 EPS: $0.77 per share
PREVIOUS PERIOD:
Prev Q2 Revenue: $127.09 million
Prev Q2 EPS: $0.79 per share
ADDITIONAL INFORMATION
Original Confirmation
The Company will also hold a related conference call to discuss these results.
2Q earnings 7-26-10 BMO
Sohu.com to Report Second Quarter 2010 Financial Results on July 26, 2010
Monday , July 12, 2010 05:30ET
BEIJING, July 12 /PRNewswire-Asia/ -- Sohu.com Inc. (Nasdaq: SOHU), China's leading online media, communication, search, online game and mobile value-added services company, will report its second quarter 2010 unaudited financial results on Monday, July 26, 2010, 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, July 26, 2010 (8:30 p.m. Beijing/Hong Kong time, July 26, 2010) following the quarterly results announcement.
The dial-in details for the live conference call are:
US Toll-Free: +1-877-941-6009
International: +1-480-629-9772
Hong Kong: +852-3009-5027
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 11:00 a.m. Eastern Time on July 26 through August 8, 2010. The dial-in details for the telephone replay are:
International: +852-3056-2777
Passcode: 4328860
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/ .
About Sohu.com
Sohu.com Inc. (NASDAQ: SOHU) is China's premier online brand and indispensable to the daily life of millions of Chinese, providing a network of web properties and community based/web 2.0 products which offer the vast Sohu user community a broad array of choices regarding information, entertainment and communication. Sohu has built one of the most comprehensive matrices of Chinese language web properties and proprietary search engines, consisting of the mass portal and leading online media destination www.sohu.com; interactive search engine www.sogou.com; #1 games information portal www.17173.com; the top real estate website www.focus.cn; #1 online alumni club www.chinaren.com; wireless value-added services provider www.goodfeel.com.cn; leading online mapping service provider www.go2map.com; and developer and operator of online games www.changyou.com.
Sohu corporate services consist of brand advertising on its matrix of websites as well as paid listing and bid listing on its in-house developed search directory and engine. Sohu also offers wireless value-added services such as news, information, music, ringtone and picture content sent over mobile phones. The Company's massively multiplayer online role-playing game (MMORPG) subsidiary, Changyou.com (NASDAQ: CYOU), currently operates five online games, including the in-house developed Tian Long Ba Bu, one of the most popular online games in China, and the licensed Blade Online, Blade Hero 2, Da Hua Shui Hu and Zhong Hua Ying Xiong. Sohu.com, established by Dr. Charles Zhang, one of China's internet pioneers, is in its fourteenth year of operation.
For investor and media inquiries, please contact:
In China:
Mr. James Deng
Senior Finance Director
Sohu.com Inc.
Tel: +86-10-6272-6596
Email: ir@contact.sohu.com
Mr. Chen Yuan Yuan
Christensen
Tel: +86-139-2337-7882
Email: ychen@ChristensenIR.com
In the United States:
Mr. Jeff Bloker
Christensen
Tel: +1-480-614-3003
Email: jbloker@ChristensenIR.com
SOURCE Sohu.com Inc.
SOHU: Brean Murray Starts @ Hold
Wednesday, April 28, 2010 08:42ET
Issuer: Sohu.com Incorporated (NasdaqNM: SOHU)
Analyst Firm: Brean Murray
Ratings Action: INITIATE
Current Rating: Hold
China Ad Plays: Brean Murray Says Buy BIDU, SINA; Hold SOHU.
By Eric Savitz
Brean Murray analyst Andrey Glukhov this morning launched coverage of the China Internet advertising sector, where he sees “stellar growth” this year, driven by 30%-plus expansion of client budgets. “We expect market leaders to separate themselves from the pack and continue to capture a disproportionate amount of spending,” he writes.
His ratings:
Baidu (BIDU): Buy, $800 target. “The company has ample runway benefiting from a large number of catalysts,” including growth in online ads, market share gains, opportunities to boost coverage on page views, increasing cost per click and a strengthening competitive position.
Sina (SINA): Buy, $50 target. “Poised to emerge as a winning play on the comprehensive portal space,” he writes.
Sohu (SOHU): Hold, no target. “Losing market share” in the portal segment to Sina and Tencent. Longer term, he adds, China may only be able to support 1-2 dominant portal players.
Tencent Holdings (0700.HK): Buy, target 195 Honk Kong dollars. “A core holding in the China Internet space…take advantage of the recent underperformance in the stock to add to positions.”
In today’s trading:
BIDU is up $1.70, or 0.3%, to $621.81.
SINA is off 66 cents, or 1.8%, to $35.50.
SOHU is off 93 cents, or 1.9%, to $48.61.
Tencent in Hong Kong trading is off HK$1.60, or 1%, to HK$159.10.
SOHU: UBS Securities Cuts to Neutral from Buy; Analyst Notes
Monday , April 26, 2010 11:50ET
Issuer: Sohu.com Incorporated (NasdaqNM: SOHU)
Analyst Firm: UBS Securities Inc.
Ratings Action: DOWNGRADE
Current Rating: Neutral (from Buy)
Analyst Comments: The firm cites competition in the portal business for the downgrade.
Sohu sees return to profit growth as ads pick up
Mon Apr 26, 2010 8:08am EDTStocks
http://www.reuters.com/article/idCNSGE63P0IF20100426?rpc=44
* Q1 EPS $0.73 versus $0.72 view
* Sees Q2 revenues between $139 mln-$144 mln
* Expects key events like Shanghai World Expo to boost ads (Rewrites throughout, adds quotes, background and detail)
By Melanie Lee and Bijoy Koyitty
SHANGHAI/BANGALORE, April 26 (Reuters) - Sohu.com (SOHU.O), China's No.2 Internet portal, forecast a return to year-on-year growth in the second quarter on strong outlook, as it posted a first-quarter fall in profit that was in line with expectation.
The company said it expects high-profile events such as the Shanghai World Expo and the soccer World Cup to drive growth in its advertising segment, which constitutes more than 30 percent of its total revenue.
"We are optimistic that business will accelerate as advertisers ramp up their promotional campaigns," said Belinda Wang, Sohu's chief operating officer.
Sohu's Chief Executive, Charles Zhang, said the focus this year would be on diversifying Sohu's games portfolio and acquiring licensed video content for its online portal.
Sohu spun off its online game unit, Changyou (CYOU.O) last year as a separately listed company.
Sohu said its second-quarter could see non-GAAP earnings of 87 cents to 92 cents a share, on revenue of $139 million to $144 million.
Analysts were expecting earnings of 84 cents a share, on revenue of $140.4 million, but it was not immediately clear if the profit forecast was comparable with Sohu's guidance.
"The second-quarter revenue guidance for 17-22 percent year-on-year growth, materially accelerated from just 1 percent year-on-year growth in the first-quarter, should ease concerns over near-term market share losses," said Citigroup analyst Catherine Leung in a note.
China is the world's largest Internet market, with 404 million users at the end of the first quarter, according to government statistics.
Sohu competes in an increasingly cut-throat environment in the portal space against market leader Sina Corp (SINA.O), as well as leading game operators like NetEase.com (NTES.O) and Tencent Holdings (0700.HK).
Sohu posted first-quarter results for its advertising segment that were in-line with market expectation, and said an expansion pack for its blockbuster online martial arts game Tian Long Ba Bu helped drive upside in its online games segment.
For the first-quarter, the company reported net income of $41.3 million, compared with $44.6 million, or $1.15 a share, in the year-ago period.
Net income attributable to Sohu.com shareholders fell to $30.2 million, or 73 cents a share, from $44.6 million, or $1.15 a share, after the spin off of its Changyou online games unit last year.
Revenue rose 12 percent to $129.5 million, helped by a 17 percent increase in online games revenue.
Analysts on average were expecting earnings of 72 cents a share on revenue of $128.2 million, according to Thomson Reuters I/B/E/S.
Sohu shares have fallen 7 percent this year, underperforming the Nasdaq index, which is up about 11 percent. (Editing Doug Young and Rupert Winchester) (melanie.lee@thomsonreuters.com; +86 21 6104 1778; Reuters Messaging: melanie.lee.reuters.com@reuters.net)
Sohu.com Reports First Quarter 2010 Unaudited Financial Results
Monday , April 26, 2010 03:00ET
BEIJING, April 26 /PRNewswire-Asia/ -- Sohu.com Inc. (Nasdaq: SOHU), China's leading online media, communications, search, online games and wireless value-added services group, today reported unaudited financial results for the first quarter ended March 31, 2010.
First Quarter 2010 Highlights(1)
-- Total revenues were US$129.5 million, up 12% year-over-year, exceeding
the high end of the Group's guidance.
-- Brand advertising revenues were US$39.5 million, near the high end of
the Group's guidance.
-- Online game revenues reached a record US$72.1 million, up 17%
year-over-year and 2% quarter-on-quarter, within the Group's guidance.
-- Before deducting the share of net income pertaining to the
Non-Controlling Interest in Changyou, non-GAAP net income for the first
quarter of 2010 was US$48.4 million, exceeding the high end of the
Group's guidance, up 3% year-over-year and down 4% quarter-on-quarter.
-- After deducting the share of net income pertaining to the
Non-Controlling Interest in Changyou, non-GAAP net income for the first
quarter of 2010 was US$33.8 million, or US 86 cents per fully diluted
share, exceeding the high end of the Group's guidance.
(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.com, commented, "We continued to execute our strategies in our portal and online game businesses. We are significantly ramping up our library of exclusive and licensed video content as many of the great media companies in China and around the world partner with us. By combining licensed content with our own in-house produced material, we are able to expand and promote our full offering to a rapidly growing online community. Our online game business also continues to produce encouraging results. Aggregate peak concurrent users surpassed one million for the first time, which clearly shows our growing momentum as we retain existing users and attract new ones. Strategic releases of updates proved to be successful in reinforcing the popularity of our existing games. Meanwhile, we've been focusing on diversifying our game portfolio through greater efforts on developing the differentiated games in our 2010 pipeline."
Commenting on Sohu's brand advertising business, Ms. Belinda Wang, Co-President and COO, added, "Brand advertising revenues were in-line with our expectations and we are optimistic that business will accelerate as advertisers ramp up their promotional campaigns ahead of the World Expo and World Cup. Our nationwide marketing reach and diversified platform position us well as brands look for broad-based and effective advertising solutions in China."
First Quarter Financial Results
Revenues
Total revenues for the first quarter ended March 31, 2010 were US$129.5 million, representing a sequential decrease of 5% and an increase of 12% year-over-year.
Brand advertising revenues for the first quarter of 2010 totaled US$39.5 million, representing a sequential decrease of 14% and an increase of 1% year-over-year.
Online game revenues for the first quarter of 2010 were US$72.1 million, representing increases of 2% sequentially and 17% year-over-year.
Wireless revenues for the first quarter of 2010 were US$13.3 million, representing decreases of 15% sequentially and 1% year-over-year.
Gross Margin
Gross margin was 75% in the first quarter of 2010, compared with 75% in the fourth quarter of 2009 and 76% in the first quarter of 2009. Non-GAAP gross margin for the first quarter of 2010 was 75%, compared with 75% in the fourth quarter of 2009 and 76% in the first quarter of 2009.
Brand advertising gross margin for the first quarter of 2010 was 56%, compared with 65% in the fourth quarter of 2009 and 65% in the first quarter of 2009. Non-GAAP brand advertising gross margin for the first quarter of 2010 was 59%, compared with 65% in the fourth quarter of 2009 and 65% in the first quarter of 2009.
Online game gross margin for the first quarter of 2010 was 93%, compared with 92% in the fourth quarter of 2009 and 94% in the first quarter of 2009. Non-GAAP online game gross margin in the first quarter of 2010 was also 93%, compared with 92% in the fourth quarter of 2009 and 94% in the first quarter of 2009.
Wireless gross margin for the first quarter of 2010 was 48%, compared with 44% in the fourth quarter of 2009 and 43% in the first quarter of 2009. Non- GAAP wireless gross margin for the first quarter of 2010 was 48%, compared with 44% in the fourth quarter of 2009 and 43% in the first quarter of 2009.
Operating Expenses
For the first quarter of 2010, Sohu's operating expenses totaled US$48.5 million. Non-GAAP operating expenses totaled US$43.0 million, down 4% sequentially from US$45.0 million and up 19% year-over-year. The year-over-year increase primarily reflects an increase in marketing expenses.
Operating Margin
Operating margin was 37% in the first quarter of 2010, compared with 39% in the fourth quarter of 2009 and 43% in the first quarter of 2009. Non-GAAP operating profit margin was 42% for the first quarter of 2010, compared with 42% in the previous quarter and 45% in the first quarter of 2009.
Income Tax Expense
For the first quarter of 2010, excluding non-cash income tax expense of US$0.5 million recorded for tax benefits from share-based awards, non-GAAP income tax expense was US$7.4 million, compared with US$8.2 million in the previous quarter.
Net Income
Before deducting the share of net income pertaining to the Non-Controlling Interest in Changyou, GAAP net income for the first quarter of 2010 was US$41.3 million, down 3% quarter-over-quarter and 7% year-over-year. Non-GAAP net income for the first quarter of 2010 was US$48.4 million, down 4% quarter-over-quarter and up 3% year-over-year, exceeding the Group's guidance.
After deducting the share of net income pertaining to the Non-Controlling Interest in Changyou, GAAP net income for the first quarter of 2010 was US$27.9 million, or US 73 cents per fully diluted share. Non-GAAP net income for the first quarter of 2010 was US$33.8 million, or US 86 cents per fully diluted share, a decrease of 6% quarter-over-quarter, exceeding the Group's guidance.
Cash Balance
The Company continued to maintain a debt-free balance sheet and a strong cash position of US$599.2 million as of March 31, 2010.
Ms. Carol Yu, Co-President and CFO of Sohu, commented, "Our current business is strong, with healthy growth in advertising, a stable portfolio of existing online games that continue to grow, and a debt-free balance sheet that is supported by strong cash flow. Solid momentum of video content, a promising online game pipeline also provide us substantial room to expand further and deliver value to our shareholders over the long term."
Supplementary Metrics for Online Game Results
Operations
Aggregate registered accounts for Changyou's games as of March 31, 2010 increased 8% quarter-over-quarter and 38% year-over-year to 87.4 million.
Aggregate peak concurrent users ("PCU") for Changyou's games rose 5% quarter-over-quarter and increased 7% year-over-year to approximately 1.04 million.
Aggregate active paying accounts ("APA") for Changyou's games was 2.4 million, which was consistent with last quarter and an increase of 5% year-over-year.
Aggregate average revenue per active paying account ("ARPU") for Changyou's games increased 2% quarter-over-quarter and 12% year-over-year to RMB201, which is within a range that Changyou targets to keep games affordable for the majority of Chinese game players.
Revenue
Total online game revenues for the first quarter of 2010 increased 2% quarter-over-quarter and 17% year-over-year to US$72.1 million.
Revenues from game operations for the first quarter of 2010 increased 2% quarter-over-quarter and 18% year-over-year to US$70.2 million. The increases were mainly due to the ongoing popularity of the Company's flagship games.
Overseas licensing revenues for the first quarter of 2010 decreased 10% quarter-over-quarter and 17% year-over-year to US$1.9 million. The decrease was largely the result of greater competition in mature online game markets abroad.
Business Outlook
Sohu estimates total revenues for the second quarter of 2010 to be between US$139.0 million and US$144.0 million, with advertising revenues of US$54.0 million to US$56.0 million.
Sohu estimates brand advertising revenues for the second quarter of 2010 to be between US$51.0 million and US$53.0 million.
Sohu estimates online game revenues for the second quarter of 2010 to be between US$74.0 million and US$77.0 million.
Sohu estimates non-GAAP net income for the second quarter of 2010, before deducting the share of non-GAAP net income pertaining to the Non-Controlling Interest in Changyou, to be between US$48.0 million to US$50.5 million. After deducting the share of non-GAAP net income pertaining to the Non-Controlling Interest in Changyou, Sohu estimates non-GAAP net income for the second quarter of 2010 to be between US$34.0 million to US$36.0 million, and non-GAAP fully diluted earnings per share for the second quarter of 2010 to be between US 87 cents and US 92 cents.
Assuming no new grants of share-based awards, Sohu estimates compensation expense and income tax expense related to share-based awards for the second quarter of 2010 to be between US$6.5 million and US$7.5 million, which includes Changyou's share-based compensation expense for the second quarter of 2010 estimated to be between US$2.0 million and US$2.5 million. Considering Sohu's share in Changyou, the estimated impact of this expense under US GAAP is expected to reduce Sohu's fully diluted earnings per share for the second quarter of 2010 by US 15 cents to US 17 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, net income and net income per share, which are adjusted from results based on GAAP to exclude the compensation cost of share-based awards granted to employees. 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 share-based compensation expense from its non-GAAP financial measure is useful for itself and investors. Further, the amount of share-based compensation expense cannot be anticipated by management or business line leaders and these expenses are not built into the annual budgets and quarterly forecasts, which is the basis for information Sohu provides to analysts and investors as guidance for future operating performance. As share-based compensation expense 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, the monthly financial results for internal reporting and any performance measure for commissions and bonuses are based on non-GAAP financial measures that exclude share-based compensation expense.
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 share-based compensation expense, is that the share-based compensation charge 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 we have 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 we have presented.
Notes to Financial Information
Financial information in this press release other than the information indicated as being non-GAAP is extracted from Sohu's unaudited interim financial statements prepared in accordance with GAAP.
Financials continued at:
http://www.knobias.com/story.htm?eid=3.1.4e592a17c9aeddfb64629e4f42a92fad8048f4ed7020c8a68a5df3b63448810e
Q1 Adj EPS 86c vs $1.2 Beats 70c Est;
Guidance Varies from Consensus
Monday , April 26, 2010 09:23ET
QUARTER RESULTS
Sohu.com Incorporated (SOHU) reported Q1 results ended March 2010. Q1 Revenues were $129.45M; +11.85% vs yr-ago; BEATING revenue consensus by +0.98%. Q1 EPS was 73c. Adjusted Q1 EPS was 86c; -28.33% vs yr-ago; BEATING earnings consensus by +22.86%.
GUIDANCE
Q1 RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: $129.45M $115.74M +11.85% $128.20M +0.98%
---------- ------------ ------------ ---------- ------------ ----------
EPS: 73c N/A N/A N/A N/A
Adj EPS: 86c $1.20 -28.33% 70c +22.86%
---------- ------------ ------------ ---------- ------------ ----------
I'm pretty much focusing in on the chart and the things I look at. I am a strong believer in gaps filling and in either direction - which leads me to believe SOHU will eventually break this trend and move back up into the 65 range to fill that upper gap down made in late October. Can earnings help get us over this line? I don't know. Guidance? possibly?
Google is gone but Baidu has taken over....and even knowing that I still believe SOHU will do just fine.
looks good today. Shorts covering. I dont think numbers will be better but i have a feeling they may raise estimates due to Advertsing coming back and Google leaving china. what say you?
Followers
|
7
|
Posters
|
|
Posts (Today)
|
0
|
Posts (Total)
|
353
|
Created
|
02/28/05
|
Type
|
Free
|
Moderators |
Sohu.com Inc. (NASDAQ: SOHU) is China's premier online brand and indispensable to the
daily life of millions of Chinese, providing a network of web properties and community based/web
2.0 products which offer the vast Sohu user community a broad array of choices regarding
information, entertainment and communication. Sohu has built one of the most comprehensive
matrices of Chinese language web properties and proprietary search engines, consisting of:
· www.sohu.com, the mass portal and leading online media destination;
· www.sogou.com, an interactive search engine with over 10 billion retrieved Chinese web pages;
· www.chinaren.com, the #1 online alumni club;
· www.focus.cn, a top real estate and home furnishing website;
· www.17173.com, the #1 games information portal;
· www.goodfeel.com.cn, a wireless value-added services provider; and
· www.go2map.com, a leading online mapping service provider.
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |