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Sohu Rising

Sohu Rising

The stock advances after a first-quarter profit rise.

The stock advances after a first-quarter profit rise.

Sohu

(SOHU) - Get Free Report

, a Chinese Internet company, said first-quarter profit rose 5% as gains in advertising sales were undercut by higher costs.

Profit rose 5% to $6 million, or 16 cents per share, up from $5.7 million, or 15 cents, a year earlier, Sohu says.  Sales rose 32% to $31.3 million. Excluding stock-based compensation costs, profit was $7.8 million, or 20 cents. The results surpassed analysts' estimates of 15 cents in profit on sales of $29.9 million.

Shares rose $1.56, or 6%, to $26.92 in after-hours trading.

"We have been successful in pursuing partnership opportunities surrounding high-profile events because of our existing portal strength and brand presence in China," says Chief Executive Charles Zhang in a statement. "We believe we will be able to increasingly leverage these content partnerships to grow our user base and further drive the strong momentum we have been experiencing."

Advertising revenue gained 35% to $20.1 million, while non-GAAP operating expenses increased 20% to $13 million. The increase was due to the company's sponsorship of the Olympics and personnel costs.

Second quarter will be $31.5 million to $33.5 million, with profit of 20 cents to 22 cents, Sohu says.  Analysts had forecast a profit of 16 cents and sales of $32.3 million, according to Thomson Financial.

The Chinese market, which is attracting attention from behemoths including

Google

(GOOG) - Get Free Report

, is continuing to attract U.S. investors because demand for the Web is surging at a rapid rate.

Investors will wait to see if the upside will translate to other Chinese Internet companies, including

Baidu

(BIDU) - Get Free Report

,

Sina

(SINA) - Get Free Report

and

Shanda

( SNDA), which report in the coming weeks.

Chinese Web companies, including Sohu, recently agreed to pledge to rid their sites of "unhealthy" content, according to Reuters. The campaign comes amid a campaign by the Chinese government to clean up the Web, the news agency says.