Earnings: SURGES Past Analyst Revenue Estimate

In spite of rising revenues, Inc.’s (NASDAQ:SOHU) profit declined in the second quarter. is an Internet company that, through its subsidiaries, provides online products and services with news, information, entertainment and communication in China.

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Results: Net income for Inc. fell to $12.8 million (28 cents per share) vs. $44.3 million ($1.10 per share) a year earlier. This is a decline of 71.1% from the year-earlier quarter.

Revenue: Rose 28.7% to $255.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Inc. fell short of the mean analyst estimate of 38 cents per share. It beat the average revenue estimate of $248.3 million.

Quoting Management: Dr. Charles Zhang, Chairman and CEO of Inc. commented, “We had a solid second quarter with total revenues rising nearly 30% from last year, despite challenges faced in our brand advertising business. As China’s economic growth continued to decelerate and we initiated some operational transitions in our online video business, revenues from brand advertising recorded only a low single-digit year-on-year increase.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 35.7%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 42.2% from the year earlier quarter.

For three quarters in a row, the company’s net income has fallen. In the first quarter, net income fell 48.4% from the year earlier, while the figure fell 38.9% in the fourth quarter of the last fiscal year.

The company fell short of forecasts after beating estimates in the previous two quarters. In the first quarter, it topped the mark by 8 cents, and in the fourth quarter of the last fiscal year, it was ahead by 5 cents.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from $1.01 per share to 59 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $3.39 a share to $2.27 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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