Results Should Bode Well for (SOHU) reported earnings overnight and thus far the results seem to ironically be driving competitor (SINA) more than Sohu itself. Sohu has a bigger gaming component that Sina but both its brand advertising and gaming (combined 87% of the company’s revenues) showed nice 30% year over year growth metrics.

Brand advertising revenues were US$60.1 million, up 31% year-over-year and 2% quarter-over-quarter.

Online game revenues reached US$91.7 million, up 30% year-over-year and 7% quarter-over-quarter.

The other 2 business lines are really too small to matter (search) or shrinking (wireless) . Gross margin flattish year over year. EPS for quarter $1.07 versus estimated $0.99. The company is actually a pretty solid value at these levels, at 21x the just completed year of 2010, and 17x next year’s estimates. Full report here.

Via Bloomberg:, owner of China’s fourth-most visited website, posted a better-than-estimated 41 percent gain in profit after the company raised prices and boosted services such as video sharing. Fourth-quarter net income jumped to $41.5 million, or $1.07 a share, from $29.4 million, or 76 cents, a year earlier. The Beijing-based company was expected to post profit of $38.6 million, based on the average of eight analysts’ estimates compiled by Bloomberg. Sales rose 27 percent to $173.2 million.

Sohu has increased spending on services such as its Sogou Internet search-engine to add users and counter competition from websites including Tencent Holding’s and China’s more than 450 million Web users are downloading more content using their mobile phones as wireless network speeds increase, the government said., the online-games unit of Sohu, increased fourth-quarter profit 23 percent to $47.8 million, according to a separate statement today. Sales rose 30 percent to $91.7 million, helped by games such as “Tian Long Ba Bu,” it said.

Sohu raised advertising rates on some sites by 15 percent in October, according to a Jan. 13 report by Morgan Stanley.

Sohu ranks behind only Baidu Inc., China’s biggest search- engine, Tencent’s, and Sina Corp. in user traffic


Sohu forecast first-quarter revenue may rise to between $164.5 million and $169.5 million. This compares with the $161.5 million average of eight analysts’ estimates compiled by Bloomberg.

Disclosure: No positions

About Mark Hanna 542 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

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