Sohu: We Have Some Bad News For China

Chinese internet portal (NASDAQ:SOHU) reported first quarter results that surpassed analysts’ expectations on both earnings and revenue.

Net earnings for were $23.1 million (53 cents a share), down from $44.8 million ($1.01 a share) a year ago. On an adjusted basis earnings were $0.61 a share whereas analysts expected $0.48. Revenues for the quarter were $227 million against street expectations of $225.8 million. Brand advertising grew only 7 percent compared to about 30 percent in the previous two quarters.

“The economic slowdown in China clearly had an impact on advertiser sentiment,” Chief Operating Officer Belinda Wang said in a statement. “Because of lackluster auto sales and the slowing real estate market, many automakers and real estate developers decided to defer their marketing plans.”

The outlook for advertising in the second quarter is even worse – it is expected to grow just 0.4 percent to 5 percent.

For the second quarter, the company has forecast an adjusted profit of only 40 cents to 45 cents a share on revenues in the range $244 million to $250 million. Analysts had estimated an adjusted profit of 81 cents per share on sales of $250.8 million.