Sohu.com Inc. Third Quarter Earnings Sneak Peek

Sohu.com Inc. (NASDAQ:SOHU) will unveil its latest earnings on Monday, November 5, 2012. Sohu.com is an Internet company that, through its subsidiaries, provides online products and services with news, information, entertainment and communication in China.

Sohu.com Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 42 cents per share, a decline of 65.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 61 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 42 cents during the last month. Analysts are projecting profit to rise by 60.6% compared to last year’s $1.82.

Past Earnings Performance: The company missed estimates last quarter after beating forecasts in the prior two. In the second quarter, the company reported net income of 32 cents per share versus a mean estimate of profit of 40 cents per share. In the first quarter, the company beat estimates by 8 cents.

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A Look Back: In the second quarter, profit fell 71.1% to $12.8 million (28 cents a share) from $44.3 million ($1.10 a share) the year earlier, missing analyst expectations. Revenue rose 28.7% to $255.7 million from $198.7 million.

Wall St. Revenue Expectations: Analysts are projecting a rise of 18.5% in revenue from the year-earlier quarter to $275.9 million.

Stock Price Performance: Between October 2, 2012 and October 30, 2012, the stock price dropped $2.89 (-7%), from $41.47 to $38.58. The stock price saw one of its best stretches over the last year between March 6, 2012 and March 13, 2012, when shares rose for six straight days, increasing 13.9% (+$6.55) over that span. It saw one of its worst periods between November 11, 2011 and November 28, 2011 when shares fell for 11 straight days, dropping 19.2% (-$11.34) over that span.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 35.7% over the last four quarters.

An income boost this time around would be welcome news after profit drops in the past three quarters. Net income fell 38.9% in the fourth quarter of the last fiscal year, by 48.4% in the first quarter and again in the second quarter.

Analyst Ratings: There are mostly holds on the stock with six of 11 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.91 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 3.0 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 5.2% to $349.7 million while assets rose 2% to $1.02 billion.

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

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