Inc. Earnings: The Profit Streak Continues

Rising revenue was not enough for Inc. (NASDAQ:SOHU) as the internet information provider saw profit fall in the first 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 $23.1 million (53 cents per share) vs. $44.8 million ($1.01 per share) a year earlier. This is a decline of 48.4% from the year-earlier quarter.

Revenue: Rose 30% to $226.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Inc. reported adjusted net income of 61 cents per share. By that measure, the company beat the mean estimate of 45 cents per share. Analysts were expecting revenue of $225.8 million.

Quoting Management: Dr. Charles Zhang, Chairman and CEO of Inc. commented, “In the first quarter, our financial results were mixed. Our brand advertising business got off to a slow start mainly due to the early Chinese New Year holiday and the softening macroeconomic conditions in China.”

Key Stats:

For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 36.9%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 42.2% from the year earlier quarter.

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 5 cents in the fourth quarter of the last fiscal year, by 3 cents in the third quarter of the last fiscal year, and by 4 cents in the second quarter of the last fiscal year.

The company’s net income has fallen in each of the last two quarters. In the fourth quarter of the last fiscal year, net income fell 38.9% from the year-earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from $1.32 a share to 82 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $5.41 a share to $3.39 over the last ninety days.

Competitors to Watch: Inc.,, Inc., SINA Corporation, Google Inc.,, Inc., Yahoo! Inc., Ku6 Media Co., Ltd., Shanda Interactive Entertainment Ltd ADR, Inc, and India Ltd.

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

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