Sohu 1Q profit declines as expenses overshadow revenue; company fares better than expected

Sohu 1Q profit falls; beats expectations

SAN FRANCISCO — Chinese Web portal Sohu.com said Monday that its first-quarter profit fell 7 percent as increased operating expenses overshadowed revenue growth. The results came in ahead of analyst expectations, though.

For the quarter that ended March 31, Sohu earned $41.3 million, compared with $44.6 million in the year-ago quarter.

Excluding Sohu’s non-controlling interest in the online gaming company Changyou, the company earned $30.2 million, or 73 cents per share, compared with a profit of $44.6 million, or $1.15 cents per share, in the year-ago quarter.

On this basis, the results beat estimates of analysts polled by Thomson Reuters by a penny per share.

Revenue rose 12 percent to $129.5 million. Sohu said revenue from online games climbed 17 percent to $72.1 million, while advertising revenue rose 4 percent to $42.3 million.

Analysts were expecting $128.2 million in revenue.

But Sohu’s operating expenses also rose, adding 27 percent to $48.5 million, as sales and marketing expenses climbed.

For the current quarter, Sohu forecast revenue of $139 million to $144 million; analysts are looking for $140.4 million.

Shares of Sohu.com Inc. fell 6 cents to $52.96 in afternoon trading.