(Reuters) - Chinese Internet portal Sohu.com Inc reported better-than-expected second-quarter results, but forecast third-quarter earnings below analysts’ expectations as the company continues to face weakness in its brand advertising business.
Sohu said a slowdown in the Chinese economy and effects of operational transitions in its online video business hurt brand advertising.
Brand advertising revenues rose 2 percent to $69 million for the second quarter.
Sohu said it expects revenue from the brand advertising segment of between $76 million and $78 million, flat from the year-earlier quarter.
The Beijing-based company expects adjusted earnings of between 50 cents to 55 cents per share, for the third quarter, on revenue of $272 million to $277 million.
Analysts on average were expecting earnings of 60 cents per share, before items, on revenue of $273.7 million, according to Thomson Reuters I/B/E/S.
Net income for Sohu, which competes with SINA Corp Baidu Inc, fell to $11 million or 28 cents per share, for the second quarter, from $42.7 million or $1.10 per share, a year earlier.
Excluding items, the company earned 42 cents per share beating Wall Street’s expectations of 39 cents per share.
Revenue rose 29 percent to $256 million, below analysts’ expectations of $248.1 million.
Sohu’s shares were up 14 percent at $39.70 on Monday morning on the Nasdaq. The stock has lost close to one-third of its value since the start of the year.
Shares of its online gaming unit Changyou.com Ltd were up 16 percent at $22.49 on Monday morning after the company gave a strong third-quarter forecast and issued a one-time special dividend.
Reporting by Siddharth Cavale in Bangalore; Editing by Supriya Kurane