"BEIJING (AP) -- China's second-biggest Web portal Sohu.com Inc. said Tuesday its fourth-quarter earnings fell 32 percent, weighed down by higher costs, causing shares to drop in U.S. after-hours trading.
Quarterly earnings dropped to $6.1 million, or 16 cents per share, from $8.9 million, or 23 cents per share a year earlier. Analysts polled by Thomson Financial forecast a profit of 17 cents per share.
Revenue rose 16 percent to $34.4 million from the same period of 2005, but missed Wall Street's expectation for $35.5 million.
Sohu, which trails Sina.com among Chinese Internet content providers as measured by revenue, said the bulk of its sales came from online advertising. Ad revenue grew 23 percent year-over-year.
But results were hurt in part by a sharp rise in advertising costs. Brand advertising costs rose 66 percent to $7.1 million, while search-ad costs increased by 56 percent to $1.7 million over"
Quarterly earnings dropped to $6.1 million, or 16 cents per share, from $8.9 million, or 23 cents per share a year earlier. Analysts polled by Thomson Financial forecast a profit of 17 cents per share.
Revenue rose 16 percent to $34.4 million from the same period of 2005, but missed Wall Street's expectation for $35.5 million.
Sohu, which trails Sina.com among Chinese Internet content providers as measured by revenue, said the bulk of its sales came from online advertising. Ad revenue grew 23 percent year-over-year.
But results were hurt in part by a sharp rise in advertising costs. Brand advertising costs rose 66 percent to $7.1 million, while search-ad costs increased by 56 percent to $1.7 million over"
Looks for me like rather honest and straight forward reporting of Disastrous Q4 results, but I can not get it right without help from friendly Analyst:
"Analyst Safa Rashtchy of Piper Jaffray & Co. said Sohu's results were sound despite the lower earnings. He said a fall had been expected due to regulatory changes for wireless services that have hit revenues for all Chinese providers.
Sohu is still one of the best-positioned companies to profit from China's booming online ad market, he said.
"I thought it was a good performance," Rashtchy said. "Their advertising business is still very healthy."
Sohu is still one of the best-positioned companies to profit from China's booming online ad market, he said.
"I thought it was a good performance," Rashtchy said. "Their advertising business is still very healthy."
The same guys are covering Google - they will see "results were sound despite the lower earnings" right until the last drop in share price.
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