Seeking Alpha

Sohu (ticker: SOHU) reported Q4 2005 earnings results that beat consensus estimates by $0.02. Key stats from the quarter:

Q4 2005 Results:

  • Total revenue rose 27% y-o-y to $30.5 million above consensus estimate of $29.29 million.
  • Advertising revenue rose 28% y-o-y to $20.3 million.
  • Non-advertising revenue of $10.2 million.
  • Wireless revenue rose 7% sequentially.
  • GAAP net profit of $8.9 million or $0.23 per fully diluted share above consensus estimate of $0.21.
  • FY 2005 Results:

  • Total revenue rose 5% y-o-y to $108.3 million.
  • Advertising revenue rose 27% y-o-y to $70.9 million.
  • GAAP net income of $29.8 million or $0.77 per fully diluted share.
  • Q1 2006 Guidance:

  • Total revenue of $28.0 - $30.0 million in-line with consensus estimate of $29.2 million.
  • Advertising revenue of $19.0 - $20.0 million.
  • Non-advertising revenue of $9.0 - $10.0 million.
  • Stock-based compensation expense of $1.7 - $1.8 million.
  • As of January 1, 2006, Sohu's PRC income tax rate rose to 7.5%. Sohu expects PRC income tax expense of $0.5 - $0.7 million in Q1.
  • Sohu expects these two expenses to reduce fully diluted EPS by $0.05 - $0.06.
  • After deducting the stock-based compensation expense and PRC income tax expense, Sohu estimates fully diluted EPS of $0.14 - $0.16, below consensus estimate of $0.19.
  • Charles Zhang, Chairman and CEO of Sohu.com:

    "We had a very good quarter. We continued to execute on our core business initiatives of growing our online advertising business and developing our healthy sponsored search segment following our search product upgrade to Sogou 2.5. Our solid fourth quarter financial results, which have exceeded company top and bottom line guidance during a seasonally weak quarter, demonstrate the strength and momentum in our business. Fiscal 2005 experienced a solid 27% year-on-year increase in advertising revenues supplemented by our steadily improving wireless business."

    Source: Sohu Beats By $0.02; Guides Below Consensus EPS; Stock Up 9% in After-Hours Trading (SOHU)