NEW YORK (AP) — Shares of Sohu.com tumbled 15 percent Monday after the Chinese Web portal issued first-quarter guidance that was well below expectations.
Sohu’s fourth-quarter earnings, which actually beat Wall Street expectations, also came out on the same day that International Monetary Fund said a sharp downturn in Europe could cut China’s economic growth in half. Also on Monday, austerity negotiations in Greece, which has threatened to drag the rest of Europe into recession, were pushed back a day despite intense pressure from the European Union.
The BNY Mellon ADR China Index slid nearly 2 percent.
Sohu said Monday that for the current quarter, it expects adjusted first-quarter profit of 50 to 55 cents per share, less than half the $1.20 per share that Wall Street was looking for, according to a poll by FactSet. Projected revenue of between $219 million and $225 million was also short, with analysts expecting $237.9 million.
The company posted a profit attributable to common shareholders of $26.9 million, or 65 cents per share, down from $44 million, or $1.07 per share, in the same quarter last year.
The recent quarter’s results included $27.5 million in non-cash impairment charges. Excluding those, the company said it posted an adjusted profit of $53 million, or $1.36 per share.
Total revenue rose 42 percent to $246.2 million from $173.2 million in the year-ago period, as online game revenue jumped 34 percent to $123 million and brand advertising revenue rose 29 percent to $78 million.
Profits and revenue for the fourth quarter topped expectations, but that was overshadowed by the company’s outlook.
For the full year 2011, Sohu earned $162.7 million, or $3.93 per share, up from $148.6 million, or $3.62 per share, in 2010. Revenue rose to $279.2 million from $211.8 million.
In morning trading, shares of Sohu.com Inc. fell $9.25 to $53.80.