On Feb. 5, Sohu.com (NASDAQ:SOHU), a Chinese Internet and wireless content company, released fourth-quarter earnings for the period ended Dec. 31, 2006.

  • For the full story on Sohu.com, see our earnings take.
  • While revenue grew by 15.9% to more than $34 million, the bottom line fell by 32%.
  • The company's advertising sales set records thanks to a 30% increase year over year from brand advertising revenues.
  • Margins fell across the board, and the company cited "higher content costs, increased headcount, and higher bandwidth and server depreciation costs."
  • Sohu has a four-star rating in Motley Fool CAPS, our interactive stock community.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$34,350

$29,650

15.9%

Net Profit

$6,074

$8,937

(32.0%)

EPS

$0.16

$0.23

(30.4%)

Diluted Shares

38,780

39,435

(1.7%)



Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

63.5%

67.7%

(4.2)

Operating Margin

16.7%

21.0%

(4.3)

Net Margin

17.7%

30.1%

(12.4)

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$129,698

$133,086

(2.5%)

Accounts Rec.

$23,825

$19,283

23.6%

Inventory

N/A

N/A

N/A



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$37,795

$35,053

7.8%

Convertible Senior Notes

$59,780

$74,780

(20.1%)



Learn the ways of the balance sheet.

Cash Flow Highlights
Sohu.com must be busy online, because it forgot to include a cash flow statement in the press release.

Find out why Fools always follow the money.

Related companies:

  • Baidu.com (NASDAQ:BIDU)
  • NetEase.com (NASDAQ:NTES)
  • SINA (NASDAQ:SINA)

Related Foolishness:

Baidu.com and NetEase.com are Motley Fool Rule Breakers recommendations. SINA is a Stock Advisor pick. Take a look at other picks and how they're doing with a free trial.

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