Bloomberg News

Sohu Profit Falls as Acquisition Costs Erode Higher Web Sales

February 07, 2012

Feb. 6 (Bloomberg) -- Inc., owner of China’s third-biggest search-engine, posted an unexpected 39 percent decline in profit as the company incurred a charge from acquisitions, eroding higher advertising and games sales.

Fourth-quarter net income was $25 million, or 65 cents a share, from $41.5 million, or $1.07, a year earlier, the Beijing-based company said in a statement today. This compared with the $48.7 million average of seven analysts’ estimates compiled by Bloomberg. Sales rose 42 percent to $246 million from $173.2 million.

Sohu’s results included a $27.5 million impairment charge on acquisitions, according to the statement. The Chinese company also forecast revenue this quarter that missed analysts’ estimates by as much as 8.8 percent. First-quarter revenue may rise to between $219 million and $225 million. This compares with the $240 million average of eight analysts’ estimates.

Sohu rose 2.7 percent to $63.05 in New York trading on Feb. 3. The stock has advanced 26 percent this year, outperforming the 16 percent gain in Baidu Inc., China’s biggest Internet company by market value.

Sohu accounted for 2.7 percent of China’s search-engine market by revenue last quarter, according to research company Analysys International. Baidu Inc. increased its market share to 78.3 percent, while Google Inc. declined to 16.7 percent, according to Analysys.

--Editors: Anand Krishnamoorthy, Dave McCombs

To contact Bloomberg News staff on this story: Mark Lee in Hong Kong at

To contact the editor responsible for this story: Michael Tighe at

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