Sohu Q4 Income Declines 25% Annually
Sohu (Nasdaq:SOHU) posted net income of $42.4 million in the fourth quarter of 2009, including net income from the company’s non-controlling interest in MMORPG subsidiary Changyou (Nasdaq:CYOU), Sohu announced October 26. Net income was down 10% quarter-on-quarter and 25% year-on-year in the fourth quarter.
Total revenues fell 1% sequentially but rose 12% annually to $135.8 million in the period. Brand advertising made up $45.9 million of total revenues, down 5% from the previous quarter but up 2% year-on-year. Sohu Co-President and Chief Operating Officer Belinda Wang called fourth quarter brand advertising revenues “relatively modest” but said that the company expects advertisers to increase marketing activities in 2010 with events like the World Cup, the Asian Games and the World Expo.
Online games revenues accounted for $70.7 million of total revenue, up 21% annually and 3% sequentially. The company has five games in the pipeline in 2010 pipeline, and its second in-house developed MMORPG Duke of Mount Deer is progressing smoothly, said Sohu Chairman and CEO Charles Zhang.
Sohu’s wireless business generated revenue of $15.7 million in the quarter, a quarter-on-quarter decrease of 7%, due mainly to China Mobile discontinuing billing for wireless application protocol services in late November, but a year-on-year increase of 6%.
For the full year 2009, total revenues were $267.6 million, up 33% from 2008. Game operations contributed $259.8 million of 2009 revenues, also up 33% year-on-year, mainly due to the growing popularity of Changyou’s flagship MMORPG, TLBB, Sohu said.
Sohu forecast total revenues for the first quarter of 2010 in the range of $123 million to $128 million, with advertising contributing $40 million to $42 million of total revenues. Brand advertising is expected to bring in between $38 million and $40 million in the first quarter, while online game revenues are forecast to come in between $70 million and $73 million.
Sohu estimates non-GAAP net income for the first quarter of 2009 to be between $45 million to $47.5 million, including net income from Changyou.
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