Monday, April 25, 2011 (SOHU) with Another Flashy Quarter, Modest Increase in Guidance

TweetThis (SOHU) reported this morning and has posted another fine quarter, besting analysts' estimates of 96 cents by 5 cents, with revenue jumping 35% year over year.  Estimates for the following quarter were increased to $1.13 to $1.18 versus the current estimate of $1.10.  While the results were good, I would have thought with the run in the stock, that most of this was priced in already, but based on how the stock is acting, I am very wrong on that count.  Full report here.

Using the upper range of the new estimate for the next quarter plus this quarter's beat, full year 2011 EPS can be bumped from $4.67 to $4.80, giving a forward PE of 22.  While this seems "cheap" compared to other stocks in the Chinese internet space for most of the decade this group traded at a major discount to growth ...


  • Chinese Internet portal Inc. said its first-quarter net profit rose 48% from a year earlier, beating expectations due to strong advertising and online gaming revenue growth, and it gave an upbeat revenue outlook.
  • Sohu also said its online gaming unit Ltd. will buy a majority stake in another Chinese game developer, a move to fuel further growth amid tough competition. 
  • Net profit for the three months ended March 31 rose to $44.8 million from $30.2 million a year earlier, Sohu said in a statement. The company's net profit was above the average $38.68 million forecast of seven analysts polled by Thomson Reuters.
  • Sohu's earnings per share rose to $1.01 a share, from 73 cents a year earlier.  Revenue rose 35% to $174.4 million from $129.5 million. 
  • Brand advertising revenue rose 45% to $57.2 million, and online game revenue rose 32% to $94.9 million.
  • Sohu said it expects second-quarter revenue of $188 million-$193 million, up from $146.1 million in the same period last year and above the average $183.4 million forecast of 10 analysts in a Thomson Reuters poll.
  • Sohu projected second-quarter earnings per share, excluding share-based compensation, to be between $1.13 and $1.18, up from 96 cents a year earlier. 
[Jan 31, 2011: Results Should Bode Well for Sina]
[Feb 16, 2009: Sohu Continues Growing at Solid Pace]
[Jul 28, 2008: - Another Hit Earnings and Gaming Unit IPO Spinoff]
[June 23, 2008: - Analysts Rush to it's Defense]
[Jun 20, 2008: Sees Ad Revenue Slowing in 2009]
[Feb 4, 2008: Also Impressive]

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