Sohu.com Earnings: Here’s Why the Stock is Falling Now

Sohu.com Inc. (NASDAQ:SOHU) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 3.43%.

Sohu.com Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 107.14% to $0.58 in the quarter versus EPS of $0.28 in the year-earlier quarter.

Revenue: Rose 32.52% to $338.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Sohu.com Inc. reported adjusted EPS income of $0.58 per share. By that measure, the company beat the mean analyst estimate of $0.49. It missed the average revenue estimate of $340.27 million.

Quoting Management: Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc. commented, “We are pleased to report encouraging results across our business lines for the second quarter. Notably, for our online video business, most if not all operating metrics are ramping up fast during the first 7 months of 2013, showing robust growth in user, traffic and revenues. Sogou and Changyou businesses continued to track well, building further on their solid fundamentals. Our Group’s total revenues grew 33% year-over-year to $339 million.”

Key Stats (on next page)…

Revenue increased 10.18% from $307.6 million in the previous quarter. EPS decreased 3.33% from $0.60 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.71 to a profit $0.56. For the current year, the average estimate has moved down from a profit of $2.62 to a profit of $2.49 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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