Sohu Beats By $0.01 on Strong Ad Revs; Announces $15 Million Stock Repurchase Program; Stock Up 7% in After-Hours Trading (SOHU 3Q05 Earnings)

Sohu (ticker: SOHU) reported Q3 2005 earnings results today that beat consensus EPS estimates by $0.01. Key stats from the quarter:

Q3 Results
(all percentage changes and comparisons are year on year, unless stated otherwise)

• Total revenue rose 9.0% to $28.3 million. Consensus estimate of $27.9 million. Management guidance of $26.5 - $28.5 million.
• Total advertising revenue rose 21.4% to $18.79 million, and rose 11% sequentially.
• Brand advertising revenue rose 20.8% to $15.6 million.
• Sponsored search revenue rose 24.8% to $3.2 million.
• Non-advertising revenue fell 9.4% to $9.5 million, but rose 6% sequentially.
• Wireless revenue fell 17.0% to $6.8 million, but rose 6% sequentially.
• E-commerce revenue fell 40.8% to $879,000.
• Other revenue rose 120.9% to $1.8 million.
• Gross margin was 64.9% vs 67.7%.
• Total operating expenses rose 18.0% to $11.4 million.
• Product development expenses rose 39.7% to $3.4 million.
• Sales and marketing expenses rose 0.3% to $4.6 million.
• General and administrative expenses rose 27.3% to $2.8 million.
• Operating income fell 11.9% to $6.974 million.
• Operating margin was 24.7% vs 30.5%.
• Net income fell 3.6% to $8.0 million.
• Net margin was 28.4% vs 32.1%.
• Diluted EPS of $0.21 vs $0.21, and vs consensus estimate of $0.20.

Balance Sheet
(as of September 30, 2005)

• Cash and equivalents of $132.5 million.

Q4 Guidance

• Total revenue of $28.0 - $30.0 million. Consensus estimate of $29.82 million.
• Advertising revenue of $19.0 - $20.0 million.
• Non-advertising revenue of $9.0 - $10.0 million.
• Earnings per fully diluted share of $0.19 and $0.22. Consensus estimate of $0.22.

Stock Repurchase Program

Sohu today announced its Board of Directors has approved a stock repurchase program in which the Company plans to purchase up to US$15 million of its outstanding shares in the open market.

SOHU chart.