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Sohu Q1 2011 Profit Up 34% YoY

Sohu PR, 4/25/11

Chinese online media, communication, search, online gaming and wireless value-added services provider Sohu (Nasdaq: SOHU) has announced its unaudited financial results for the first quarter ended March 31, 2011, with total revenue reaching USD 174.4 mln, up 35% year-over-year and 1% quarter-over-quarter.

Before deducting the share of net income pertaining to the non-controlling interest in online gaming subsidiary Changyou (Nasdaq: CYOU), GAAP net income for the first quarter of 2011 was USD 55.2 mln, up 34% year-over-year and down 4% quarter-over-quarter. Non-GAAP net income for the first quarter of 2011 was USD 60.6 mln, up 25% year-over-year and down 6% quarter-over-quarter, exceeding the high end of guidance.

After deducting the share of net income pertaining to the non-controlling interest in Changyou, GAAP net income for the first quarter of 2011 was USD 39.3 mln, up 41% year-over-year and down 5% quarter-over-quarter. Non-GAAP net income for the first quarter of 2011 was USD 44.0 mln, up 30% year-over-year and down 8% quarter-over-quarter, exceeding the high end of previous guidance.

Online brand advertising revenues for the first quarter of 2011 totaled USD 57.2 mln, up 45% year-over-year and down 5% quarter-over-quarter.

Search revenues for the first quarter of 2011 were USD 8.0 mln, up 183% year-over-year and 21% quarter-over-quarter. The increase was driven by search subsidiary Sogou's increased search traffic and start-up page business.

Online game revenues for the first quarter of 2011 were USD 94.9 mln, up 32% year-over-year and 3% quarter-over-quarter.

Wireless revenues for the first quarter of 2011 were USD 11.7 mln, down 12% year-over-year and 19% quarter-over-quarter. The decrease was mainly due to the company having stopped promoting its products in March 2011.

CEO Charles Zhang said that Sohu's Sogou search engine, browser, and Chinese Pinyin input method software business saw browser active users, search traffic and search revenue all show growth exceeding 20%.

For the second quarter of 2011, Sohu estimates total revenues to be between USD 188.0 mln and USD 193.0 mln, with online brand advertising revenues between USD 65.5 mln and USD 67.5 mln. This implies non-sequential growth of 15 % to 18%, and 23% to 27% year-over-year growth. Search revenues are expected to be around USD 11 mln.

Total revenues from Changyou are expected to be between USD 97.0 mln and USD 100.0 mln, including online games revenues of USD 95.0 mln to USD 97.0 mln.

Before deducting the share of non-GAAP net income pertaining to Changyou, Sohu estimates its pro forma non-GAAP net income to be between USD 59.0 mln and USD 61.5 mln. After deducting the share of non-GAAP net income pertaining to the non-controlling interest, Sohu estimates non-GAAP net income to be between USD 44.0 mln and USD 46.0 mln.

To view Sohu's full earnings report, please click here.

Keywords: online advertising Changyou online gaming Charles Zhang guidance Internet profit revenue wireless Sogou CYOU Sohu Q1 2011 fiscal report WVAS online search

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