Sohu.com Inc, China's third-biggest Web portal, posted a 26 percent decline in first-quarter profit after it spent more on new products to lure users, sending the shares down 9.9 percent.

Net income fell to US$4.47 million, or 12 cents per American depositary share, from US$6 million, or 16 cents, a year earlier, Beijing-based Sohu said today in a statement. Sales rose 8.8 percent to US$33.1 million.

Chairman Charles Zhang spent more to add sites such as a blog written by "Memoirs of a Geisha" star Zhang Ziyi. The company also spent more to develop and promote a new version of its Sogou search site, which has lost users to market leaders Baidu.com Inc. and Google Inc.

"It's a mixed quarter," said Ming Zhao, an analyst at Susquehanna Financial Group in Bala Cynwyd, Pennsylvania. He rates the shares "positive" and doesn't own them. "The company really needs to show people that it can execute well in the second half so investors can see a ramp-up in the advertising revenue."

Analysts on average anticipated profit of $5.6 million, based on 12 estimates in a Bloomberg survey. Sohu said in February it expected revenue of between $32 million and US$34 million in the first quarter ended March 31, while analysts had estimates sales of US$33.3 million.

Second-Quarter Outlook

For this quarter, the company forecast earnings minus some costs of 17 cents to 19 cents per American depositary share, missing the 20-cent average estimate of 10 analysts polled by Bloomberg. Sohu expects sales of US$35.5 million to US$37.5 million in the quarter, compared with the US$36.5 million average analyst estimate.

Source:佚名