Sohu.com Inc. (SOHU) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $74.81 million, or $ 1.94 a share in the quarter, against a net profit of $39.12 million, or $1 a share in the last year period. On adjusted basis, net loss for the quarter stood at $64.94 million, or $1.68 a share compared with a net profit of $49.13 million, or $1.27 a share in the last year period. Revenue during the quarter dropped 21.36 percent to $410.58 million from $522.09 million in the previous year period. Gross margin for the quarter contracted 1327 basis points over the previous year period to 45.72 percent. Operating margin for the quarter stood at negative 12.56 percent as compared to a positive 8.22 percent for the previous year period.
Operating loss for the quarter was $51.56 million, compared with an operating income of $42.90 million in the previous year period.
However, the adjusted operating loss for the quarter stood at $38.39 million compared to operating profit of $40.60 million in prior year period.
Dr. Charles Zhang, chairman and chief executive officer of Sohu.com Inc., commented, "In the third quarter, the Group total revenues reached our prior guidance amid challenging operating climate that mainly affected our online advertising businesses. By business unit, for Sohu Media Portal, we strived to bring users high quality and enriched content while continued to optimize Sohu News App design. Sohu Video accelerated investment in self-developed content that would benefit our subscription business and help improve the cost structure. For Sogou, it continued to enhance its vertical search capability while the mobile search traffic maintained strong momentum. Changyou delivered better-than-expected results as its existing games performed steadily while the development of new mobile games was well on track."
For the fourth-quarter 2016, Sohu.com Inc. projects revenue to be in the range of $370 million to $400 million. The company expects net loss to be in the range of $92 million to $102 million and adjusted net loss to be in the range of $85 million to $95 million. It company forecasts diluted earnings per share to be in the range of $2.38 to $2.63 . On an adjusted basis, the company forecasts diluted loss per share to be in the range of $2.20 to $2.45.
Working capital declines
Sohu.com Inc. has witnessed a decline in the working capital over the last year. It stood at $958.40 million as at Sep. 30, 2016, down 13.21 percent or $145.87 million from $1,104.26 million on Sep. 30, 2015. Current ratio was at 1.98 as on Sep. 30, 2016, down from 2.19 on Sep. 30, 2015. Days sales outstanding went up to 53 days for the quarter compared with 49 days for the same period last year.
At the same time, days payable outstanding went up to 61 days for the quarter from 57 for the same period last year.
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