Sohu.com beats forecasts with net profit rise of 36pc
Mainland internet media giant Sohu.com is targeting solid gains this first quarter after posting record revenue and strong net profit in the quarter to December that beat analysts' estimates.
The Beijing-based company, which operates the country's fourth-most visited website and controls popular online games provider Changyou.com, yesterday reported a 35.8 per cent increase in net profit to US$44 million, compared with US$32.4 million a year ago, on significant results generated from its brand advertising, online game and search businesses.
That profit was higher than the average US$38.04 million estimate from analysts compiled by Thomson Reuters and the US$38.6 million forecast of analysts polled by Bloomberg.
Fourth-quarter revenue for Sohu. com, which is listed on the Nasdaq Stock Market in the United States, rose 27 per cent to US$173.2 million from US$135.8 million in the previous year.
Brand advertising rose 31 per cent to US$60.1 million from US$45.9 million, while online game income from Changyou.com grew 30 per cent to US$91.7 million from US$70.7 million. Search income increased 126 per cent to US$6.6 million from US$2.9 million, but mobile-related revenue fell 8 per cent to US$14.8 million from US$16.3 million.
'While I am encouraged by these strong results across our multiple business lines, I am even more excited when we look beyond our financial performance,' said Charles Zhang Chaoyang, the chairman and chief executive of Sohu.com.
Zhang said Sohu.com's efforts in online video, especially in securing high-quality authorised content, had taken the company's domestic market share from 3.4 per cent to 13.4 per cent in the past 12 months.
Changyou.com, which is also listed on Nasdaq, grew because of continued demand for its flagship game Tian Long Ba Bu. Zhang said marketing for the highly anticipated new game Duke of Mount Deer would start next month.
'With its new capital structure in place, Sogou's [search] business is quickly picking up momentum,' he said.
'Over the fourth quarter of last year, active users of the Sogou browser, related search traffic and search revenue, all grew north of 20 per cent quarter on quarter.'
In August last year, Sohu.com agreed to sell a 16 per cent stake in Sogou to a group of investors led by Hangzhou-based Alibaba Group and the Yunfeng Fund - enterprises with significant ties to internet entrepreneur Jack Ma Yun. Zhang and other members of the firm's executive management also took part in that deal.
Zhang's rosy outlook for Sohu. com is reflected in the company's guidance for this quarter. Total revenue for the quarter to March is expected to be between US$164.5 million and US$169.5 million.
Sohu.com's results last year show its revenue hit US$327.1 million, a 22 per cent increase from US$267.6 million in 2009. Its total net income was flat at US$139.3 million.