Sohu Reports Loss in Q3 Amid Slumping Advertising Revenues

Sohu.com Ltd. has reported a third-quarter net loss of $16.35 million, a decline from the prior year's profit. The drop in brand advertising revenues raises concerns among investors, supported by the company's outlook for the fourth quarter indicating more losses ahead.

Date: 12-11-2024

AI Rating: 4

Sohu.com Ltd. (SOHU) reported a challenging third quarter with a net loss attributable to the company of $16.35 million, significantly down from last year's profit of $21.37 million. This represents an EPS decline from $0.63 to $0.52. The prior year's profit was bolstered by a $35.43 million disposal gain due to the bankruptcy of a unit, which skews direct year-on-year comparisons.

On a continuing operations basis, the net loss widened to $16.35 million or $0.52 per share, compared to the previous year's net loss of $14.06 million or $0.41 per share. The adjusted net loss from continuing operations was $12.42 million or $0.39 per share, up from $10.20 million or $0.30 per share, indicating worsening operational performance.

Total revenues for the quarter were $152 million, marking a 5 percent increase from $145.43 million last year. However, this growth is overshadowed by a significant decline in brand advertising revenues, which fell 15 percent year-over-year to $19 million. In contrast, online game revenues experienced a 9 percent growth to $128 million.

Looking ahead, Sohu forecasts a troubling fourth quarter, estimating a net loss between $30 million and $40 million and an adjusted net loss between $26 million and $36 million. The company also projects brand advertising revenues to decline further, estimated between $17 million and $19 million, which translates to an annual decrease of between 6 percent and 16 percent. Online game revenues are also expected to drop, projected between $97 million and $107 million, a decrease of 7 percent to 15 percent year-over-year.

Stocks: SOHU