Tuesday, November 6, 2012

Sohu.com Posts Encouraging Earnings

Sohu.com (SOHU) reported earnings overnight, and thus far the results seem to ironically be driving competitor Sina.com (SINA) more than Sohu itself. Sohu has a bigger gaming component that Sina, but both its brand advertising and gaming (combined 87% of the company's revenues) showed nice 30% year over year growth metrics. Brand advertising revenues were $60.1 million, up 31% year-over-year and 2% quarter-over-quarter, while online game revenues reached $91.7 million, up 30% year-over-year and 7% quarter-over-quarter.

The other two business lines are really too small to matter (search) or shrinking (wireless) . Gross margin was flattish year over year. EPS for the quarter was $1.07 versus an estimated $0.99. The company is actually a pretty solid value at these levels, at 21x the just-completed year of 2010, and 17x next year's estimates. More info can be found here and at Bloomberg.

In terms of guidance, Bloomberg notes:

Sohu forecast first-quarter revenue may rise to between $164.5 million and $169.5 million. This compares with the $161.5 million average of eight analysts’ estimates compiled by Bloomberg.

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