Earnings: Sohu Thinks Ahead to the Olympics; Third-Quarter Profit Beats Forecasts

Sohu reported better-than-expected Q3 results as advertisers tapped into China’s growing Internet user base. The company is now thinking ahead to the 2008 Olympics in Beijing.
Revenue jumped 29 percent to $35.4 million. Branded advertsing was $21 million, up 35 percent year-over-year and a gain of 9 percent compared with the previous quarter. Net income fell 18 percent to $6.6 million, or 17 cents per share, on stock-based compensation costs. Excluding those costs, profit was 22 cents, exceeding Wall Street expectations of 16 cents and revenue of $33.6 million, according to AP. “People are going to feel very good about this set of results,” Citibank analyst Jason Brueschke told the AP, adding that as the internet becomes more video-centric, Sohu is perhaps the best positioned Internet company in China to take advantage of that evolution.
In the conference call with investors, CEO Charles Zhang said the company will benefit from its links with the Olympics:
“As we are moving closer to the Olympics, we expect more local partners and sponsors who would like to advertise with their respective joint logos, and in order to do so, they can only do so on Sohu.” (via SeekingAlpha transcript). “We have built a comprehensive sports offering surrounding our role in the Olympics, and continue to add new, exclusive and exciting elements. … On November 7th this year, 2006, the first anniversary of Sohu winning Olympic sponsorship, we will launch our Olympic channel to serve the needs of the Internet population, as well as anxious Olympic fans throughout China.”

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