Sohu Web portal profits up 383%

Company sees 2008 strengthening

BEIJING -- Chinese media company posted a nearly fivefold surge in quarterly profit on Monday that exceeded analysts' forecasts, and the company predicted stronger results for the rest of the year.

First-quarter net income for the Beijing-based company rose to $21.6 million, or 55 cents per diluted share, from $4.5 million, or 12 cents a diluted share, in the year-earlier quarter.

Analysts had forecast a profit, on average, of $14.4 million, according to Reuters Estimates. The company had projected first-quarter earnings per share of 43 cents-45 cents.

Total revenue grew 156% to $84.8 million, fuelled by growth in online brand advertising and spending by corporate marketers ahead of the Beijing Olympics.

Reported revenue compares with the $69.3 million, on average, analysts had predicted, according to Reuters Estimates. Ad revenue rose 36% to $34.8 million, while non-advertising revenue, largely from gaming, totaled $50.1 million, it said.

"Looking ahead at the remainder of 2008, we believe the growth of our brand advertising business will be even stronger," Sohu Co-President Belinda Wang said in a statement. The bullish outlook reflects rising Olympic ad spending and Sohu's growing penetration in the online market, she said.

China had 210 million Internet users by the end of 2007 and is expected surpass the United States to become the world's largest Internet market in terms of users later this year. Sohu is also benefiting from robust demand for its online game Tian Long Ba Bu.

Sohu forecast second-quarter revenue of $93 million to $96 million. Analysts predicted revenue, on average of $77.5 million, according to Reuters Estimates.

Ad sales, virtually all of from brand advertising, are expected to reach $40 million to $41 million and non-advertising revenue, mostly from gaming, should rise to $53 million to $55 million, the company said.