SOHU's Q2 Earnings and Revenues Beat Estimates, Down Y/Y

Sohu.com Limited SOHU reported relatively soft second-quarter 2022 results with a year-over-year decrease in revenues and net income due to lower contribution from both the brand advertising sector and the other revenues sector. The company aims to focus on refining its products and improving its operational efficiency in the impending quarters.

Quarter Details

Net income in the quarter was $8.7 million or 25 cents per share compared with $40.7 million or $1.03 per share in the year ago quarter, beating the Zacks Consensus Estimate of a loss of 28 cents.

Revenues reported in the quarter were $194.8 million compared with $204.4 million in the year-ago quarter, beating the Zacks Consensus Estimate of $192 million. In the quarter, Brand advertising revenues declined 32.3% year over year to $24.9 million. Online games revenues of $157.3 million rose 4%. Other revenues totaled $12.6 million, down 22.9%.

The online games sector reported better-than-expected results, primarily driven by product upgrades and refinement in the quality in the news and overall content. During the quarter, the company’s advanced live broadcasting technology, strong operating track record and extensive media resources reinforced its credentials as a mainstream media platform.

For PC games, total average monthly active user accounts (MAU) were 2.3 million, up 7% year over year, due to the introduction of a new PVP, player versus player event for regular TLBB PC and upgrade of the artistic design of game characters. Total quarterly aggregate active paying accounts (APA) were 1 million, up 15% year over year.

For mobile games, total average MAU was 2 million, up 7% year over year, which was driven from games launched during the recent quarters, including Little Raccoon, Heroes and Bright Stars. Total quarterly APA was 0.4 million, down 13% due to natural decline of older games including TLBB Honor, and Legacy TLBB Mobile.

 

Sohu.com Inc. Price, Consensus and EPS Surprise

Sohu.com Inc. Price, Consensus and EPS Surprise

Sohu.com Inc. price-consensus-eps-surprise-chart | Sohu.com Inc. Quote

Operating Details

Quarterly GAAP operating profit was $10.1 million, down 59.3% from the year-ago quarter. Operating expenses jumped 1.1% year over year due to an increase in traffic and user acquisition cost. However, top-line contraction led to lower operating profit in the quarter.

Liquidity

As of Jun 30, 2022, the company had $394.4 million in cash and cash equivalents with $443.7 million of long-term tax liabilities.

Q3 Outlook

For the third quarter of 2022, Brand advertising revenues are estimated to be in the range of $25-$28 million, which implies a decrease of 17% to 26% year over year. Online game revenues are estimated in the band of $138-$148 million, which indicates a decrease of 11% to 17% year over year. Sohu’s non-GAAP net loss is likely to be between $35 million and $25 million. GAAP net loss is projected between $38 million and $28 million.

Zacks Rank & Other Stocks to Consider

Sohu currently carries a Zacks Rank #2 (Buy). You can see tthe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

First Bancorp. FBP, sporting a Zacks Rank #1, delivered an earnings surprise of 17.1%, on average, in the trailing four quarters. Over the past year, the stock has risen 18.1%.

Earnings estimates for the current year have moved up 16.8% since August 2021. First Bancorp operates in six segments – Commercial and Corporate Banking, Mortgage Banking, Consumer Banking, Treasury and Investments, United States Operations and Virgin Islands Operations.

Home Bancorp, Inc. HBCP, sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 15.5% in the previous quarter and a stellar earnings surprise of 26.9%, on average, in the trailing four quarters. The company specializes in providing one-to-four family first mortgage loans, home equity loans and lines, commercial real estate loans, construction and land loans, multi-family residential loans, commercial and industrial loans and consumer loans.

Earnings estimates for the current year have moved up 27.2% since August 2021.

Liberty Energy Inc. LBRT has a Zacks Rank #1. The Zacks Consensus Estimate for Liberty Energy’s current-year earnings has been revised 307.7% upward since August 2021.

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