Sohu (SOHU) Q3 Loss Narrows On Lower Costs, Revenues Down Y/Y
Zacks Investment Research | Nov 05, 2018 10:20PM ET
Sohu.com Inc. (NASDAQ:SOHU) reported third-quarter 2018 non-GAAP loss of 81 cents per share, which was much narrower than the year-ago quarter’s loss of $2.38.
The figure was also better than management’s expectation of a loss between $1.40 and $1.65 per share. The Zacks Consensus Estimate was pegged at a loss of $1.64.
Sohu’s revenues of $460 million were down 11% year over year but came within the guided range of $445–$470 million.
Quarter Details
Total online advertising revenues (inclusive of revenues from brand advertising, search and search related businesses) increased 4% year over year to $312 million.
Brand advertising revenues in the reported quarter however fell 24% on a year-over-year basis to $57 million, mainly due to decrease in portal and video advertising revenues.
Search and search-related revenues increased 13% year over year to $255 million driven by growth in mobile search traffic and improved monetization. However, the search advertising business was negatively impacted by suspension of a portion of Sogou's advertising services for 10 days. This was done to ensure compliance with government regulations.
Online game revenues of $96 million were down 28% from the year-ago quarter, primarily due to “natural decline in revenue of Changyou's older games, including Legacy TLBB Mobile.”
Sohu Video revenues decreased 40% from the year-ago quarter to $26 million. Quarterly loss was $27 million, narrower than a loss of $60 million in the year-ago quarter. Management noted that its focus on content strategy helped it release three original dramas in the quarter. Additionally, Sohu was also successful in releasing a second season for a popular reality show in third-quarter 2018.
Sohu Media Portal revenues were down 17% on a year-over-year basis to $31 million due to budget cuts from large enterprises on the back of economic slowdown in China. However, management stated that the company is focusing on enhancing content quality to expand its user base. Moreover, design upgrade, particularly for The Moment, and increase in user base of Sohu news application is a positive.
Sogou’s (NYSE:SOGO) revenues increased 7% year over year to $277 million. In third-quarter 2018, Sogou enhanced its search and mobile keyboard products by using artificial intelligence (AI) technology.
Changyou’s (NASDAQ:CYOU) revenues declined 29% year over year and 5% sequentially to $118 million.
Sohu.com Inc. Price, Consensus and EPS Surprise
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