Sohu.com 1Q Net More Than Doubles; Growth In Online Game Unit
May 04 2009 - 4:14AM
Dow Jones News
Sohu.com Inc. (SOHU) said Monday its first quarter net profit
more than doubled from a year earlier as its recently-listed online
gaming unit outperformed its advertising-dependent Internet portal
business.
"Our online game business has been more resilient to the weak
economic conditions and continues to show strong growth momentum.
This more than offsets any temporary impact on our portal business
brought by the economic weakness in China," Sohu Chief Executive
Charles Zhang said in a statement.
The Chinese Internet portal's net profit for the three months
ended March 31 rose to $44.6 million, or $1.15 a share, from $21.6
million, or $0.55 a share, a year earlier, but fell 21% from $56.6
million, or $1.45 a share, in the fourth quarter.
Excluding share-based compensation, Sohu posted first quarter
net profit of $1.20 a share, exceeding its guidance by 10
cents.
Revenue rose 36.4% to $115.7 million from $84.8 million a year
earlier, but fell 4.8% from the fourth quarter of 2008, as online
advertising fell.
Sohu's online gaming unit, Changyou.com, said its first quarter
net profit rose to $33.5 million, or 71 cents per American
Depositary Receipt, more than double the $15.2 million, or 32 cents
per ADR that it earned a year earlier and up 15% from the previous
quarter.
Changyou, which listed on Nasdaq last month, posted first
quarter revenue of $61.6 million, up 50% from a year earlier and up
6% from the previous quarter.
Changyou began trading in the U.S. in April following a $128.3
million initial public offering. Following the IPO, Sohu retains a
68.5% stake in the company.
"Online games, which provide low-cost entertainment, continue to
be a very popular leisure time activity in China, even in an
economic downturn, making the industry a strong defensive play,"
Changyou chief executive Tao Wang said in a statement.
Sohu said it expects revenue in the second quarter to be between
$121 million and $125 million. The company expects net profit
excluding share-based compensation to fall to between $31 million
and $33 million from $46.9 million in the second quarter, as the
Changyou spinoff dilutes some of its earnings.
-By Aaron Back, Dow Jones Newswires; (8610) 6588-5848;
aaron.back@dowjones.com