Sohu.com's Net Loss Leads to Stock Plunge
China's online platform reported quarterly results, sending its stock on a 10 percent slide.
Shares in Sohu.com Inc. (NASDAQ: SOHU) plunged nearly 10 percent today to $27.28 after the Internet company reported a net loss of $93 million for the first quarter, compared with a loss of $68 million a year ago.
Sohu's revenue for the first quarter showed an increase of 22 percent to $455 million, compared with $374 million the same period last year.
Net loss per American depositary share was $2.39 per share in the first three months of 2018, compared with a loss of $1.76 per share year-over-year.
The Beijing-based company said the loss was mainly driven by an income tax expense, which was reported at $63 million, compared with $11 million a year ago. The company said the increase in tax expense was mainly to cover a $47 million tax liability of Changyou.com Ltd. (Nasdaq: CYOU), Sohu's online game subsidiary.
Excluding the impact of the charge for taxes, the company reported an operating loss of $31.5 million compared with a $47.3 million loss a year ago.
"We started 2018 steadily as we delivered better-than-expected topline growth in the first quarter, mainly driven by the solid performance of our search and online game businesses," said chairman and chief executive officer of Sohu, Charles Zhang.
Zhang also commented on Sogou Inc. (NYSE: SOGO), Sohu's subsidiary search engine, which has been among its main growth drivers.
"Sogou's core search revenues rose over 50 perecent year-over-year. During the first quarter, Sogou Mobile Keyboard added 30 million new users, bringing the total DAU [daily active users] to 362 million," he said.
Looking ahead, Sohu said it expected revenue growth between 6 and 11 percent in the second quarter resulting in revenue of $485 to $510 million. The loss attributable to Sohu is expected to be between $56 million, or $1.44 per share, and $66 million, or $1.70 per share.
Shares in the company closed at $27.28 per share, nearly 10 percent down. (Source: Thomson Reuters Eikon)