Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Chinese web-portal Sohu.com (SOHU -0.91%) plunged 10% today after its quarterly results and outlook disappointed Wall Street.
So what: The stock has soared in 2013 on bullishness over Sohu's online video segment, but today's second-quarter revenue miss -- $338.90 million versus $340.27 million -- coupled with in-line guidance is forcing analysts to rein in their enthusiasm a bit. And while online ad revenue spiked 49% over the year-ago period, year-over-year operating expenses also jumped 43%, suggesting that Sohu's competitive environment remains particularly intense.
Now what: Management now sees third-quarter revenue of $358 million-$370 million, in line with the average analyst estimate of $362 million. "In the first half of 2013, we invested intensively in some key initiatives for video, search, games and mobile," said Co-President and CFO Carol Yu. "I am confident the momentum will continue into the remaining months in 2013 and beyond." Of course, with the stock still up about 90% from its 52-week lows and trading at a forward P/E of 20, I'd wait for an even more a pullback before betting on that.
