The 10-second takeaway
For the quarter ended June 30 (Q2), Sohu.com met expectations on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share expanded significantly.
Gross margins dropped, operating margins shrank, net margins expanded.
Sohu.com booked revenue of $338.9 million. The eight analysts polled by S&P Capital IQ foresaw revenue of $339.7 million on the same basis. GAAP reported sales were 33% higher than the prior-year quarter's $255.7 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 $0.58. The seven earnings estimates compiled by S&P Capital IQ predicted $0.57 per share. Non-GAAP EPS of $0.58 for Q2 were 38% higher than the prior-year quarter's $0.42 per share. GAAP EPS of $0.56 for Q2 were 100% higher than the prior-year quarter's $0.28 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 66.5%, 40 basis points worse than the prior-year quarter. Operating margin was 19.0%, 500 basis points worse than the prior-year quarter. Net margin was 6.4%, 140 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $360.6 million. On the bottom line, the average EPS estimate is $0.70.
Next year's average estimate for revenue is $1.37 billion. The average EPS estimate is $2.80.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,118 members out of 1,186 rating the stock outperform, and 68 members rating it underperform. Among 253 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 234 give Sohu.com a green thumbs-up, and 19 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sohu.com is hold, with an average price target of $55.55.
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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 recommends 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.