Sohu (Nasdaq: SOHU) forecasts profit below estimates, shares fall

Shawshank, VA 4/30/12 (StreetBeat) -- Chinese Internet portal Sohu.com Inc (Nasdaq: SOHU) reported strong quarterly results, but its second-quarter profit outlook fell well short of estimates as the company forecast slowing brand advertising revenue growth for the third straight quarter.

Sohu expects second-quarter brand advertising revenue to rise between 0.4 percent and 5 percent. First-quarter brand advertising revenue rose 7 percent. It had grown 29 percent in the fourth-quarter of 2011 and 30 percent in the third quarter.

"The economic slowdown in China clearly had an impact on advertiser sentiment," Chief Operating Officer Belinda Wang said in a statement.

"Because of lackluster auto sales and the slowing real estate market, many automakers and real estate developers decided to defer their marketing plans."

Brand advertising revenue comes from advertisements on some popular Sohu-run websites like Sohu.com, Focus.cn and Chinaren.com, where the company offers original and syndicated content. It accounts for nearly three-quarters of total online advertising revenue.

The company, which competes with SINA Corp, expects an adjusted profit of 40 cents to 45 cents per share for the second quarter, on revenue of $244 million to $250 million.

Analysts on average expected an adjusted profit of 81 cents per share, on revenue of $250.8 million, according to Thomson Reuters I/B/E/S.

Net income attributable to Sohu.com fell to 23.1 million, or 53 cents per share, from 44.8 million, or $1.01 cents per share, a year ago.

The company's shares, which closed at $55.76 on Friday on the Nasdaq, fell 6 percent to $52.20 in Monday premarket trading.

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Sohu.com (Nasdaq: SOHU) Shares Plunged: What You Need to Know

Northern, WI 2/6/12 (StreetBeat) -- Shares of Chinese online information company Sohu.com (Nasdaq: SOHU) plummeted 15% on Monday after its current-quarter guidance disappointed Wall Street.

So what: Sohu's fourth-quarter results managed to top estimates, but a weak first-quarter outlook -- management sees about a 20% drop in brand advertising revenue -- is triggering fresh fears over the company's growth potential. Gross margins continue to shrink as well, fueling previous concerns about Sohu's long-term profitability.

Now what: Management expects first-quarter adjusted EPS of $0.50 to $0.55 on revenue of $219 million to $225 million, versus the consensus of $1.13 in adjusted EPS and a top line of $238 million. "For online advertising, our conscientious efforts in growing online video and search businesses are bringing strong growth in revenues, users and traffic," said CEO Dr. Charles Zhang. "In 2012, we aim to make [Sohu Group] even more dominant in China's Internet market." It's tough to buy that optimism given today's disappointing news, but with the stock now down about 50% from its April highs and trading at a single-digit P/E, Sohu might be cheap enough to take a chance on.

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