SHANGHAI/SAN FRANCISCO (Reuters) - Chinese media company Sohu.com Inc on Monday said quarterly profits rose 148 percent, fueled by record growth in advertising and online gaming in one of the world's biggest Internet markets.
Sohu, which means "search fox" in Chinese, reported fourth-quarter net income rose to $15.1 million, or 39 cents per diluted share, from $6.1 million, or 16 cents per diluted share, in the year-earlier quarter.
Excluding stock option expenses, the company reported a profit of $17.0 million or 43 cents per diluted share.
Analysts had expected a net profit and a profit excluding one-time items, on average, of 31 cents per share, according to Reuters Estimates.
Profit margin rose to 71 percent from 67 percent in the third quarter and 63 percent in the same quarter of 2006.
Revenue at the Beijing-based company grew 90 percent to $65.3 million, exceeding analysts' average forecast of $56.5 million, according to Reuters Estimates. Forecasts ranged from $54.4 million to $58.0 million.
In December, the company raised its fourth-quarter outlook to between $55.5 million and $57.5 million, an increase of $2 million over the previous range, saying demand for its Tian Long Ba Bu online game was better than expected.
Analysts say Sohu's growth is being driven by healthy advertising sales in the run-up to the Beijing Olympics this year, as well as robust gaming revenues from its popular game Tian Long Ba Bu, translated as Sky Dragon Eight Factions.
Sohu said it expected first-quarter revenue of between $66.5 million to $68.5 million. Analysts predicted revenue, on average of $59.9 million, according to Reuters Estimates. Forecasts varied from $56.9 million to $62.0 million.
Advertising revenue is expected to reach $33.5 million to $34.5 million and non-advertising revenue, mostly from gaming should rise to $33 million to $34 million, the company said.
Excluding one-time items, the company said it expected first-quarter earnings per share of between 43 cents and 45 cents. On the same basis, analysts were looking for a profit of 34 cents per share, according to Reuters Estimates.
Stock-based compensation is expected to reduce net earnings per share by 8 cents to 9 cents, the company forecast.
China had 210 million Internet users at the end of 2007, second only to the United States. China is expected to become the world's largest Internet market in terms of users early in 2008, the official Xinhua news agency reported, citing industry sources.
($1=7.182 Yuan)
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