Sohu
(Figures in thousands, except per-share data)
|
SINA |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Sales |
$56,059 |
$49,624 |
13% |
|
Net Profit |
$10,719 |
$9,093 |
17.9% |
|
EPS |
$0.19 |
$0.16 |
18.8% |
|
Diluted Shares |
58,419 |
58,774 |
(0.6%) |
| SINA |
Q3 2006 |
Q3 2005 |
Change* |
|---|---|---|---|
|
Gross Margin |
64.24% |
67.60% |
(3.36) |
|
Operating Margin |
18.59% |
18.50% |
0.09 |
|
Net Margin |
19.12% |
18.32% |
0.80 |
| SOHU | Q3 2006 | Q3 2005 | Change |
|---|---|---|---|
| Sales |
$35,398 |
$27,399 |
29.2% |
| Net Profit |
$6,628 |
$8,462 |
(21.7%) |
| EPS |
$0.17 |
$0.21 |
(19%) |
| Diluted Shares |
38,787 |
39,750 |
(2.4%) |
| SOHU | Q3 2006 | Q3 2005 | Change* |
|---|---|---|---|
| Gross Margin |
64.92% |
67.47% |
(2.55) |
| Operating Margin |
17.25% |
27.03% |
(9.78) |
| Net Margin |
18.72% |
30.88% |
(12.16) |
*Expressed in percentage points.
You can see that Sohu is growing its sales at more than double the rate of Sina's sales, but it's also bleeding money on the bottom line because of increased expenses. However, Sohu's ad revenues and wireless segments are both growing strong. Sohu's sales growth has been slowing down over the past couple of years, so if it can pursue its online initiatives (a blog site with social networking features and online TV channels) successfully, it could help maintain this quarter's growth over the long term.
So what about Sina? Its revenue growth has been slowing recently also, but this quarter showed improved sales growth and strong ad revenue growth to offset weakness in its wireless services.
Sohu's pursuing its online media business aggressively, but, as Rick Munarriz pointed out, Sina's already the top news portal in China. That's the classic tradeoff between growth and maturity. So which is better?
It's hard to make that decision based on a short-term period. But using this type of information could give you an indication as to where these companies stand in their growth cycles. Sohu's more of a gamble at this point as it transitions into an online business, but Sina's strong presence has helped it become a recommendation for the Motley Fool Stock Advisor newsletter. As David Gardner pointed out when he re-recommended the stock to subscribers, Sina is still ahead of Sohu in terms of Web traffic and makes the top 10 cut of the most trafficked global websites. To see all the other reasons why he's picked Sina twice for the market-crushing newsletter service, just click here to take a free 30-day trial of Stock Advisor today.
Motley Fool e-commerce sector head Shruti Basavaraj owns no shares of any company mentioned above. Get ringside seats to the Motley Fool's disclosure policy.
