Sohu.com Inc. (SOHU), a Chinese e-tailer and Internet search engine offering a wide range of online products, services, and media, announced second quarter results this morning that far exceeded what analysts were expecting. Non-GAAP net income increased 423% year over year to $42.3 million, or $1.07 per share, vs. analysts’ estimates of 67 cents per share. Revenues rose 162% for the same period to $102.0 million vs. $96.5 million consensus. Excluding share-based compensation expense, Sohu.com earned $1.02 per share.
“We are very pleased with our strong performance this quarter,” said Dr. Charles Zhang, Chairman and CEO of Sohu.com. “Sohu achieved another milestone in the Company’s history with total revenues exceeding $100 million which further demonstrated Sohu’s leadership position in the China Internet space, driven by our strong media influence, premier content offerings and increased popularity of our products such as Sohu Blogs and Sogou Pinyin, and the growth of our online games business. We expect that penetration of the Internet in China will be escalated to an even higher level with the Beijing 2008 Olympic Games and that, combined with our technological advancements and portal strength, will help us to continue our success for the remainder of 2008 and beyond.”
The company offered revenue and earnings guidance for the third quarter well ahead of what analysts currently anticipate. Revenues are forecast to be in a range of $112 million to $116 million vs. estimates of $106.8 million. The company expects to earn $1.00 to $1.05 per share in non-GAAP net income vs. consensus estimates of 71 cents per share.
SOHU closed at $82.82 on Friday and has traded in a 52-week range of $27.30 – $91.50. Early pre-market action indicates a gap higher on the open of about 11%. SOHU gained over 9% last week ahead of today’s report. Baidu.com (BIDU), China’s largest provider of Internet search, soared last week on the strength of its second quarter earnings. Solid numbers from SOHU and BIDU bode well for Sina Corp. (SINA), another competitor in the space due to report earnings in about two weeks.
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