What happened

Shares of Sohu.com (NASDAQ:SOHU) rose on Tuesday, the second day of gains following the Chinese Internet company's first-quarter results. Sohu beat analyst estimates for both revenue and earnings, and it provided guidance that was ahead of expectations. The stock was up 11.9% at market close.

So what

Sohu reported first-quarter revenue of $431 million, down 5% year over year but about $26 million above the average analyst estimate. Brand advertising revenue slumped 24% year over year to $43 million; search and search related advertising revenue rose 6% year over year to $234 million; and online game revenue declined 6% year over year to $99 million. On a constant-currency basis, total revenue would have increased by about 1% year over year.

A rising stock chart.

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Non-GAAP earnings per American depositary share (ADS) came in at a loss of $1.39, up from a loss of $1.50 in the prior-year period and $0.08 higher than analysts were expecting. Gross margin declined by 3 percentage points from the prior-year period to 40%.

Sohu CEO Charles Zhang discussed the progress the company made during the quarter: "Sohu Media continued to make progress upgrading its products and content on our platform and we explored new ways to diversify revenue sources. Sohu Video consistently offered appealing self-developed dramas and its financial loss continued to narrow due to strict cost controls."

Now what

Sohu expects to generate between $469 million and $494 million of revenue in the second quarter. Brand advertising revenue is expected between $47 million and $52 million, down 15% to 24% year over year. Online game revenue is expected between $90 million and $100 million, down 5% to up 6% year over year. Analysts were expecting revenue guidance of $459.8 million on average.

Non-GAAP net loss per ADS is expected between $0.95 and $1.20, well above of the loss of $1.54 analysts were expecting.

An earnings beat and solid guidance from Sohu was enough to propel the stock to two days of strong gains.

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