Net income was $33.45 million, or 82 cents a share, little changed from $33.53 million, or 79 cents, a year earlier, Sohu said in a statement. The Beijing-based company was expected to post profit of $32.2 million, based on the average of 11 analysts? estimates compiled by Bloomberg.

Sohu last year spun off online games unit Changyou.com Ltd. to focus on selling advertising to companies. Chairman Charles Zhang is boosting spending to develop Sohu?s search engine, Sogou, after Google Inc. moved its Chinese service offshore amid a standoff with local regulators on Web censorship.

Sales increased 15 percent to $146.1 million, Sohu said. Revenue from Internet advertising rose 26 percent to $57.1 million, while online game sales gained 17 percent to $77.7 million.

Third-quarter revenue will range from $153 million to $158 million, Sohu said.

Sogou accounted for 1.1 percent of China?s paid-search market last year, making it the country?s third-biggest behind Baidu Inc. and Google, according to research company iResearch.

Source : Konaxis

For the first quarter, the company reported net income of $41.3 million, or 73 cents a share, compared with $44.6 million, or $1.15 a share, in the year-ago period.

Revenue rose 12 percent to $129.5 million, helped by a 17 percent increase in online games revenue.

On a non-gaap basis, the company earned 86 cents a share.

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.

For the second quarter, the company forecast 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.

Source : Konaxis

Sohu’s Changyou.com competes against NetEase.com, Tencent Holdings and Shanda Games on China’s $4 billion online game market.

Changyou posted a 21 percent rise in fourth-quarter revenue to $70.7 million and net profit rose by more than a third to $38.9 million.

Changyou makes up more than half of Sohu’s total revenue.

Sohu said current first-quarter revenue would be $123-$128 million, less than the $135.8 million in the fourth quarter and below expectations of $139.9 million, according to Thomson Reuters.

“We didn’t expect much for the first-quarter numbers because a lot of (Changyou’s) games have been delayed,” said CLSA analyst Elinor Leung. “I think the earliest new game will only be launched in the second quarter.”

The firm said non-GAAP operating expenses increased 14 percent on higher marketing costs, while revenues for advertising and wireless segments were flat.

Fourth-quarter net profit fell to $32.3 million from a record $56.6 million a year ago. On a non-GAAP basis, net income was $35.8 million on revenue of $135.8 million.

China’s advertising market remained weak last year as companies slashed advertising and marketing budgets because of the financial crisis. Analysts expect brand advertising to bounce back in 2010 driven by big ticket events such as the World Expo held in Shanghai and the Asian Games in Guangzhou.

Source : Konaxis

Dr. Charles Zhang, chairman and CEO of Sohu.com, said in a press statement, ‘We believe that these results are made possible only by our long-term strategic vision regarding the Chinese Internet space, such as our sponsorship of the 2008 Beijing Olympics, and by our continued technological development and advancement, such as with our in-house developed online game Tian Long Ba Bu. All of these achievements demonstrate the strength and power of the Sohu brand and our ability to continue to execute on our plan to lead the Chinese Internet space.’

Gross margin for the first quarter of 2008 was 76%, increased from 71% in the previous quarter and 60% in the same period of 2007. Non-GAAP gross margin was 76% in the first quarter of 2008, up from 72% in the previous quarter and 61% in the same period of 2007. The gross margin expansion was primarily due to the contribution from Tian Long Ba Bu. Net income for the first quarter of 2008 was US$21.6 million or US$0.55 per fully diluted share.

Advertising revenues for the first quarter of 2008 totaled US$34.8 million, a 3% quarter-on-quarter increase and a 36% year-on-year increase. For the first quarter of 2008, Sohu’s non-advertising revenues, which are derived mainly from online game and wireless value-added services, were US$50.1 million, representing 59% of total revenues. Online game revenues for first quarter of 2008 increased 71% quarter-on-quarter and 24 times year-on-year. Wireless revenue increased 17% quarter-on-quarter and 54%
year-on-year. Non-advertising gross margin was 85%, compared to 79% in the previous quarter and 52% in first quarter of 2007. Non-GAAP non-advertising gross margin was 85%, compared to 79% in the previous quarter and 52% in first quarter of 2007

For first quarter of 2008, Sohu’s operating expenses totaled US$34.0 million. Income tax expense was US$9.2 million, compared to US$0.7 million for the previous quarter and US$0.3 million for the same period last year.

Sohu estimates total revenues for the second quarter of 2008 to be between US$93 million to US$96 million.

Source : Chinatechnews

Dr. Charles Zhang, chairman and CEO of Sohu, commented, “We are excited about the way the fourth quarter is shaping up, with on-track advertising business and a stronger than expected performance by TLBB. We believe that this is a direct result of our continued focus on the development of our core technological strengths and advancements. Fueled by the increased contribution from our online games business, we are able to further reinvest strategically into our technology and our portal business so as to continue to create and enhance shareholder value.”

Sohu is raising its guidance for the fourth quarter of 2007 for total revenue, which is now expected to be between US$55.5 million and US$57.5 million, an increase of US$2 million over previous guidance, with advertising revenue guidance unchanged from previously reported estimates of US$31 million to US$32 million, but with non-advertising revenue now expected to be between US$24.5 million and US$25.5 million, an increase of US$2 million over previous guidance.

The revised non-advertising guidance results from stronger than expected performance by Sohu’s online game Tian Long Ba Bu. On November 1, 2007, Sohu successfully launched its second expansion pack of TLBB. Peak concurrent users of the game have exceeded 500,000. Although TLBB is experiencing robust growth to date, Sohu anticipates the game to mature starting first quarter of 2008. Sohu now estimates that non-GAAP fully diluted earnings per share for the fourth quarter of 2007 will be between US$0.36 and US$0.38, an increase of US$0.03.

Source : Chinatechnews

Total revenues for third quarter ended September 30, 2007 were US$51.5 million, compared to revenues of US$39.0 million for second quarter ended June 30, 2007, and US$35.4 million for third quarter ended September 30, 2006. Gross margin of 67% in third quarter of 2007 increased from 61% in the previous quarter and 64% in the same period of 2006. Non-GAAP gross margin was 67% in the third quarter of 2007, up from 62% in the previous quarter and 65% in the same period of 2006.

Net income for third quarter of 2007 was US$9.7 million or US$0.25 per fully diluted share. Non-GAAP net income for third quarter of 2007 was US$11.7 million or US$0.30 per fully diluted share. This compares to non-GAAP net income of US$8.1 million or US$0.21 per fully diluted share for second quarter of 2007 and US$8.5 million or US$0.22 per fully diluted share for third quarter of 2006.

Advertising revenues for third quarter of 2007 totaled US$31.5 million, an 11% quarter-on-quarter increase and a 32% year-on-year increase. Advertising revenues, consisting of US$29.8 million in brand advertising and US$1.7 million in sponsored search, accounted for 61% of total revenues in the third quarter of 2007. Brand advertising revenues for third quarter of 2007 increased 12% quarter-on-quarter and 42% year-on-year. Sponsored search revenues for third quarter of 2007 were flat quarter-on-quarter and decreased 39% year-on-year. Advertising gross margin for third quarter of 2007 was 63%, up from 62% for the previous quarter and down from 69% in the third quarter of 2006. Non-GAAP advertising gross margin for third quarter of 2007 was 64%, flat with the previous quarter and down from 71% in the third quarter of 2006. The year-on-year decrease was mainly due to increased content costs, bandwidth and server depreciation expenses.

For the third quarter of 2007, Sohu’s non-advertising revenues, which are derived mainly from online games and wireless value-added services, were US$20.0 million, representing 39% of total revenues. Online games revenues for third quarter of 2007 increased 232% quarter-on-quarter and 473% year-on-year. Wireless revenue increased 4% quarter-on-quarter and decreased 23% year-on- year. Non-advertising gross margin was 72%, compared to 56% in the previous quarter and 54% in third quarter of 2006. Non-GAAP non-advertising gross margin was 72%, compared to 56% in the previous quarter and 54% in third quarter of 2006. Those increases were due to the contribution from TLBB.

For third quarter of 2007, Sohu’s operating expenses totaled US$25.6 million. Non-GAAP operating expenses totaled US$23.9 million, an increase of 43% from the previous quarter and up 58% year-on-year. The increase was primarily due to continued investment in product development and Sohu branding, marketing expenses for TLBB and Sohu 3.0, as well as an increase in bonuses to reward employees for their contribution to good results.

In third quarter 2007, Sohu disposed its equity interest in an associated company, resulted in a gain of $0.6 million.

As of September 30, 2007, subsequent to the redemption of its zero coupon convertible senior notes of $58.5 million in July 2007, Sohu’s balance of cash, cash equivalents and investments in marketable debt securities remained at a comfortable level of US$76.9 million, compared to US$113.1 million and US$129.7 million as of June 30, 2007 and December 31, 2006, respectively.

Sohu estimates total revenues for the fourth quarter 2007 to be between US$53.5million to US$55.5 million, with advertising revenues of US$31 million to US$32 million and non-advertising revenues of US$22.5 million to US$23.5 million. Sohu estimates brand advertising revenues for the fourth quarter of 2007 to be between US$29.5 million to US$30.5 million.

Source : Chinatechnews