Lower than expected results from Sohu.com(NASDAQ:SOHU) has continued to shatter investor’s confidence. SOHU shares plummeted from the peak of $104 a share in 2011 to around $32 a share at present. Sohu.com shares extended its downturn in 2018 after the company posted poor financials for the final quarter of last year and provided downbeat guidance for this year.
The internet company missed its consensus revenue estimate for the fourth quarter by $14 million, primarily due to the decline in online gaming revenues and brand advertising revenues. The company posted a total revenue of $510 million – which increased 24% year over year but declined 1% on sequential basis.
Its brand advertising revenues plunged 27% in Q4 to $72 million from the past year period. Online gaming revenues stood around $109 million, behind 17% quarter-over-quarter.
Sohu.com posted operating loss of $41 million in the final quarter of 2017, compared to the loss of $51 million in the year-ago period.
Commenting on the results CEO said, “We have built a stronger product development team and seen encouraging user metrics of Sohu News App. For Sohu Video, 2017 was a transformative year when we shifted our focus to original content and began to significantly cut spending on traditional TV programs.”
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Analysts upgraded Sohu.com Stock Rating Despite Bleak Outlook
Sohu.com provided the bleak outlook for the first quarter of 2018. It expects total revenues to land in the range of $410 million to $435 million, down from $510 million it posted in the previous quarter. Its brand advertising revenues are likely to decline by 26% to 32% on a year over year basis, down 16% to 23% on sequential basis.
After the massive selloff in Sohu.com share price, analysts upgraded its stock from sell to hold ratings. ValuEngine and Zacks Investment has upgraded SOHU shares to “HOLD” from “sell” rating, while BidaskClub upgraded its stock from “strong sell” to a “sell” rating in the latest research report.
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