The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Sohu.com beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share shrank significantly.
Margins contracted across the board.
Sohu.com booked revenue of $285.4 million. The 12 analysts polled by S&P Capital IQ anticipated revenue of $275.6 million on the same basis. GAAP reported sales were 23% higher than the prior-year quarter's $232.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.77. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.56 per share. GAAP EPS of $0.63 for Q3 were 46% lower than the prior-year quarter's $1.17 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 66.1%, 520 basis points worse than the prior-year quarter. Operating margin was 22.3%, 930 basis points worse than the prior-year quarter. Net margin was 9.1%, 1,100 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $292.3 million. On the bottom line, the average EPS estimate is $0.70.
Next year's average estimate for revenue is $1.06 billion. The average EPS estimate is $2.19.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,166 members out of 1,234 rating the stock outperform, and 68 members rating it underperform. Among 282 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 261 give Sohu.com a green thumbs-up, and 21 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sohu.com is outperform, with an average price target of $54.44.
Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is Sohu.com on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Sohu.com to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Sohu.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.