- SOHU is guiding for Q4 revenue of $378M-$390M and EPS of $0.30-$0.35; the former is above a $369.9M consensus, but the latter is below a consensus of $0.48.
- No explanation for the guidance is given, but at least some of the blame lies with Sohu's Changyou subsidiary. Changyou shares are down 17.3% premarket after the online gaming firm guided for Q4 revenue of $193M-$199M and EPS of $0.34-$0.41 vs. a consensus of $190.3M and $1.39; the EPS shortfall is due to a major Q4 ramp in marketing spend.
- Also, Changyou saw a 14% Q/Q and 21% Y/Y drop in gaming monthly active users thanks to a drop in active accounts for its popular Tian Long Ba Bu MMO game before the launch of a new expansion pack.
- Sohu's online ad sales (48% of revenue) rose 21% Q/Q and 56% Y/Y in Q3; the Y/Y pace is faster than Q2's 49% clip. A 60% Y/Y increase in brand ad sales (driven by Sohu's online video and real estate ops) was largely responsible.
- Online game revenue (Changyou, 44% of revenue) fell 4% Q/Q and rose 7% Y/Y. The Y/Y clip represents a slowdown from Q2's 24%. The Sogou search unit, which Tencent will soon own a major stake in, saw revenue grow 48% Y/Y in Q3 vs. 61% in Q2.
- Sohu's gross margin was 66%, flat Q/Q and Y/Y. Opex rose 19% Q/Q and 53% Y/Y (exceeding rev. growth of 29%).
- Shares have priced in some good news this year.
- Q3 results, PR
Sohu -10% premarket following mixed earnings, guidance
Oct 28 2013, 09:30 ET