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What: Shares of Chinese Internet company Sohu.com
So what: Sohu's first-quarter profit blew out expectations -- adjusted EPS of $0.61 versus the consensus of $0.48 -- but a weak second-quarter outlook is forcing analysts to lower their growth estimates yet again. In fact, management forecasts slowing brand advertising growth for the third straight quarter, suggesting that the economic headwinds facing Sohu aren't exactly letting up.
Now what: Management now sees second-quarter adjusted EPS of $0.40 to $0.45, well below the average analyst estimate of $0.81. "The economic slowdown in China clearly had an impact on advertiser sentiment," said COO Belinda Wang. "Because of lackluster auto sales and the slowing real estate market, many automakers and real estate developers decided to defer their marketing plans." Of course, with the stock flirting with its 52-week lows -- now down more than 50% over the past year -- and trading at a cheapish forward P/E, much of the bad news might already be baked into the price.
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