Sohu.com Inc. (SOHU:US), the owner of China’s third-largest Web portal, reported second-quarter profit that beat analyst estimates as an increase in online video viewers led advertisers to boost spending.
Net income doubled to $22 million from a year earlier, the Beijing-based company said in a statement today. The result surpassed (SOHU:US)the $19.7 million average of three analysts’ estimates compiled by Bloomberg. Revenue rose 33 percent to $339 million, compared with the $341 million average of six analysts’ estimates.
Sohu has invested in developing mobile apps and online video content to strengthen its Internet media and entertainment offerings. The number of people who accessed the Internet via mobile devices rose 10 percent to 464 million in China by the end of June from the end of December, according to the China Internet Network Information Center.
“Online commercials recovered a lot, as advertisers were more willing to spend,” Eric Qiu, an analyst at Guosen Securities Co. in Hong Kong, said by phone. “Its video business posted fast growth and attracted more advertisers.”
Sohu American depositary receipts rose 2.5 percent to $70 at the July 26 close on the Nasdaq.
Sohu forecast third-quarter revenue of $358 million to $370 million, in line with the $362 million average of six analysts’ estimates.
The company has been seeking investment in its Sogou search unit to drive growth, according to Chief Executive Officer Charles Zhang.
Sogou has been in talks about a possible tie-up with China’s second-largest search engine Qihoo 360 Technology Co. (QIHU:US) to compete against Baidu Inc. (BIDU:US) Sogou is the third largest search engine in China, accounting for 5.5 percent of market share based on search queries by the end of March, according to data compiled by Bloomberg.
To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Tighe at email@example.com