The Chinese Internet space was under pressure Monday after
reported a 29% decline in fourth-quarter earnings.
The portal company earned $6.5 million, or 17 cents a share, in the quarter, compared with $8.3 million, or 21 cents a share, last year. Revenue fell 2% from a year ago to $24.1 million. Analysts had been forecasting earnings of 17 cents a share on revenue of $24.1 million.
Sohu's main disappointment came in future guidance. The company expects to earn 14 cents to 16 cents a share on revenue of $22.5 million to $23.5 million. Analysts were forecasting earnings of 18 cents a share on revenue of $24.9 million. That sent the stock down $1.91, or 11.1%, to $15.31 on Instinet.
Earnings fell in the fourth quarter due to lower revenue from wireless services. Non-advertising revenue, which predominately comprises wireless, was $8.2 million in the fourth quarter, down 46% from a year ago. The reduction was largely offset by advertising, where revenue rose 68% from last year to $15.9 million.
"Our core business of brand advertising and sponsored search, which in the fourth quarter contributed two-thirds of our revenues, is a strong and proven basis from which to re-ignite overall growth for the company," the company said in a statement.
Falling in sympathy with Sohu on Instinet were
, down 3.3%, and
, down 3.4%.