Jul. 28, 2014, 2:51 PM
- Sohu (SOHU +1%) expects Q3 revenue of $427M-$442M and EPS of -$0.75 to -$0.85 vs. a consensus of $451.4M and -$0.97. Subsidiary Changyou (CYOU +0.9%) expects Q3 revenue of $186M-$192M and EPS of -$0.11 to $0.00 vs. a consensus of $200.1M and -$0.04.
- While respectively up 275% and 86% Y/Y, Changyou's sales/marketing and R&D spend fell 14% and 30% Q/Q in Q2 to $69.4M and $49M. That helped both Changyou and Sohu beat EPS estimates in spite of revenue misses. Sohu's total opex fell 8% Q/Q and rose 67% Y/Y to $267M.
- Changyou notes it "scaled back its advertising and promotion of its PC-based and mobile-based software applications" in Q2. The R&D spend decline is attributed to lower expenses related to employee incentive plans.
- Each company saw declining gross margins: Changyou's GM fell to 76% from 78% in Q1 and 83% a year ago, and Sohu's fell to 58% from 62% in Q1 and 66% a year ago. In addition to Changyou, Sohu's GM was dinged by lower advertising margins caused by higher content/bandwidth costs.
- While Changyou's gaming revenue fell 9% Y/Y to $154M, Sohu's search/other revenue grew 84% Y/Y to $85M, and its brand ad revenue grew 33% Y/Y to $133M.
- Revenue related to the Sogou search engine (largely search/other) rose 30% Q/Q and 82% Y/Y to $91M. Average monthly active accounts for Changyou's games fell 14% Q/Q and 33% Y/Y to 24M. Changyou's platform channel accounts grew 5% Q/Q and 196% Y/Y to 252M.
- Q2 results: Sohu, Changyou
Jul. 28, 2014, 2:39 AM
Jul. 27, 2014, 5:30 PM
Jul. 25, 2014, 5:32 PM
- Goldman has raised its 2014-2016 Baidu (BIDU +10.9%) EPS estimates by 17%-23% following its sizable Q2 EPS beat and above-consensus Q3 guidance, and hiked its target by $35 to $260. BofA/Merrill, Deutsche, and Piper have also raised their Baidu PTs.
- Goldman was pleased with several datapoints provided in the Q2 report and CC (transcript). Among them: 1) Baidu topped 500M mobile search monthly active users (MAUs) in June. 2) Maps MAUs have passed 200M. 3) Baidu's app distribution platforms (led by 91 Wireless) averaged 130M downloads/day in Q2. 4) The Nuomi daily deals unit (acquired from Renren) has seen its user base double since Q4.
- BofA/Merrill observes Baidu's aggressive spending growth is now being fueled more by hiring than by marketing spend, something it expects will translate into future leverage. Marketing spend fell to 11.5% of revenue from 14.1% in Q1, while R&D grew to 14.6% from 13.6%.
- Baidu made fresh highs today, and provided a lift to rivals Qihoo (QIHU +3.7%) and Sohu (SOHU +2.2%) along the way.
Jul. 18, 2014, 11:05 AM
- Rucia Ren, formerly a senior finance manager at Baidu, has been named Changyou's (CYOU -1.5%) new acting CFO.
- Ren replaces Erin Sheng, who has been serving as interim CFO since former CFO Alex Ho left Changyou earlier this year to start his own company.
- Changyou, which accounts for nearly half of Sohu's (SOHU -0.1%) sales, posted a sizable Q1 loss due to heavy marketing/promotional spend for its games. More losses are expected for Q2.
May. 12, 2014, 2:03 PM
- Changyou (CYOU +3.9%) "plans to transfer or lay off nearly 120 employees" in its PC gaming unit, Marbridge Consulting reports. The employees will reportedly be either laid off or transferred to Changyou's mobile gaming unit.
- The report comes after the Sohu (SOHU +3%) subsidiary reported a 2% Y/Y drop in online gaming revenue (accounted for 45% of Sohu's total revenue), and also provided soft Q2 guidance caused in part by heavy spending. Like some peers, Changyou has been struggling to deal with mobile cannibalization and intense competition - Tencent remains an industry colossus.
Apr. 28, 2014, 10:17 AM
- Sohu (SOHU -4.8%) missed Q1 estimates and provided light Q2 guidance. Meanwhile, as part of a recent crackdown, the Chinese government has pulled The Big Bang Theory and other popular U.S. shows from sites such as Sohu.com, Youku.com (YOKU -4.4%), Baidu's (BIDU -5%) iQiyi, and Tencent Video (TCEHY -2.8%). Time observes The Big Bang Theory has produced 1.3B video views since launching on Sohu TV in '09.
- The news is overshadowing a $1.22B investment in Youku by Alibaba (ABABA) and an affiliated P-E firm, and a WSJ report stating Alibaba is forming a mobile search JV with leading mobile browser firm UCWeb (once targeted by Baidu).
- The deals are the latest in a long line of investments and partnerships struck by Alibaba, Tencent, and Baidu, as each firm tries to build a Web/mobile empire covering over a dozen valuable markets.
- Is Qihoo (QIHU -0.8%) next in line to make a deal? With a $21.6B market cap, the security app/browser/search provider and Baidu rival is the biggest Chinese Internet company to remain independent of the big-3. Qihoo was reported in January to be talking with Alibaba.
- Other decliners: NQ -6.5%. VIPS -5.2%. WB -4.2%. WBAI -3%. LONG -4.5%. QUNR -2.4%.
Apr. 28, 2014, 9:15 AM
Apr. 28, 2014, 8:58 AM
- SOHU expects Q2 revenue of $397M-$411M and EPS of $1.25-$1.35. The former's $404M midpoint is unfavorable to a $409.1M consensus, and the latter is well below a -$0.62 consensus. Subsidiary Changyou (CYOU) expects Q2 revenue of $182M-$188M and EPS of -$0.26 to -$0.38, below a consensus of $191.4M and $0.08. The companies also offered light guidance three months ago.
- Pressuring Sohu's Q1 EPS: Opex rose 17% Q/Q and 122% Y/Y to $295M, thanks largely to Changyou's marketing/promotional spend and new employee incentive plans. Like peers, Changyou is spending aggressively to hold its ground in a fiercely competitive Chinese gaming market.
- Also taking a toll: Sohu's gross margin fell 200 bps Q/Q and 400 bps Y/Y to 62%, due in part to higher amortization costs for licensed video content.
- Brand ad sales rose 38% Y/Y in Q1 to $111M, after growing 50% in Q4. Thanks in part to the acquisition of Tencent's Soso search unit, search revenue rose 78% to $64M; mobile search traffic rose 24% Q/Q, and PC traffic "edged up."
- Online game revenue (via Changyou) fell 2% Y/Y to $163M, after growing 9% in Q4. Changyou's gaming average monthly accounts totaled 28M, +12% Q/Q but -26% Y/Y due to declines for TLBB, Wartune, and DDTank. Changyou's platform channel accounts (video site, browser, etc.) rose 60% Q/Q and 182% Y/Y to 239M.
- Q1 results: Sohu, Changyou. PRs: Sohu, Changyou.
Apr. 28, 2014, 5:53 AM
Apr. 27, 2014, 5:30 PM
Apr. 24, 2014, 4:50 PM
- Baidu (BIDU) expects Q2 revenue of RMB11.82B-RMB-12.11B ($1.901B-$1.948B), above a consensus of RMB11.55B.
- Revenue growth accelerated to 59.1% in Q1 from 50.4% in Q4. Online ad customers fell 1.1% Q/Q to 446K after falling 2.8% in Q4, but revenue per ad customer remained steady Q/Q and rose 44.1% Y/Y to RMB20.9K ($3,362).
- As promised, Baidu continues to invest aggressively: SG&A spend soared 136.9% Y/Y to $323.2M, thanks in large to mobile promotional efforts. R&D spend rose 57.5% to $205.4M.
- Traffic acquisition costs rose to 12.4% of revenue from 12.3% in Q4 and 10.2% a year ago. Content costs (fueled by online video licensing) rose to 4.1% of revenue from 3.8% in Q4 and 1.6% a year ago.
- Up in sympathy: SINA +1.6%. SOHU +1%. QIHU +2.6%. YY +1.1%. WB +1.5%. YOKU +1.7%.
- Q1 results, PR
Mar. 26, 2014, 4:04 PM
- Aided by King's poor debut and general momentum stock weakness, U.S. and Chinese Internet stocks have fallen hard for the second time this week.
- In addition to King rival Zynga and newly-minted VR headset maker Facebook, Twitter (TWTR -7.1%) is among the leading U.S. decliners. Exactly 3 months after reaching a peak of $74.73, shares have fallen below their post-IPO opening price of $45.10. They remain well above their $26 IPO price.
- Other U.S. decliners: P -5.2%. Z -6.2%. TRLA -7%. GSVC -4.8%. SVVC -4.1%.
- Many Chinese Internet stocks have also been hit hard. Sungy Mobile (GOMO -23.2%), which posted a Q4 beat and in-line guidance yesterday afternoon, is the biggest decliner. Others: QIHU -8%. WUBA -9.5%. MOBI -10.6%. QUNR -7.8%. NQ -7%. YOD -7.6%. WBAI -7.5%. SOHU -7%. ATHM -6.5%. SFUN -6.3%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Mar. 3, 2014, 10:51 AM
- Sohu (SOHU +0.1%) COO/co-president Belinda Wang is resigning "for personal reasons," effective March 31. She's expected to stay with the company in a consulting role through year's end. No successor has been named. (PR)
- Sohu notes Wang helped develop new ad/business concepts, and also presided over the company's mobile product development. A source tells BrightWire other Sohu execs will now be responsible for the company's ad sales and website.
- Separately, Marbridge Consulting reports Sohu is planning to spin off real estate site Focus.cn and auto news site Auto.sohu.com via IPOs. Marbridge reported last week Sohu and Tencent have talked about merging their video ops.
- Gaming unit Chanyou (CYOU +4.7%), spun off by Sohu in a 2009 IPO, is rallying today.
Feb. 28, 2014, 2:16 PM
- Over the last 48 hours, Baidu, Dangdang, Youku, and 58.com have all posted Q4 beats and provided strong Q1 guidance. The numbers are giving a lift to a slew of Chinese Internet stocks.
- Notable gainers: SOHU +6.5%. PWRD +13.2%. VIPS +4.3%. YY +2.2%. RENN +3.8%. GOMO +5.5%.
- In Sohu's case, the rumor mill might also be helping out. A source tells Marbridge Consulting Sohu CEO Charles Zhang and Tencent (TCEHY +1.2%) CEO Pony Ma have talked about merging their companies' online video units. Both Sohu and Tencent trail market leaders Youku and Baidu in China's burgeoning online video market.
- Dangdang (DANG +8.6%) is adding to yesterday's big post-earnings gains after Oppenheimer hiked its PT to $15. The firm likes Dangdang's improved efficiency and partnerships with e-commerce rivals (inc. Alibaba's Tmall), and the fact mobile accounted for 13% of Q4 orders.
Feb. 24, 2014, 10:04 AM| Comment!
SOHU vs. ETF Alternatives
Sohu.com Incis a Chinese online media, search, gaming, community and mobile service group. The Company along with its subsidiaries is engaged in online advertising , search and others business, online games, mobile and others business.
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