Wall Street Luckily Found Something to Congratulate SOHU on
Here's something interesting during the SOHU earnings conference call (those who listened to it may have caught this):
In an earnings conference call, when the results are good, Wall Street analysts would typically say "Congratulations on a great quarter!" before asking questions. In SOHU's Q4 2006 call, several analysts did say "congratulations". HOWEVER, instead of talking about the quarter, they were congratulating Carol Yu, the CFO, on her promotion to co-President!
IN FACT, during the call, none of the analysts congratulated SOHU on its Q4 2006 results. This is NOT a good sign. Obviously, those analysts wanted to create goodwill with Charles Zhang and Carol Yu, but the earnings made it a difficult task. They finally decided to find something else to congratulate on, and what they luckily found was the CFO's promotion.
The truth is not pretty: SOHU has missed both the revenue and EPS consensus for Q4 2006:
Actual revenue: $34.4M vs. Wall Street Consensus: $35.5M
Actual GAAP EPS: $0.16 vs. Wall Street Consensus: $0.17
Based on the revenue and EPS misses, and the downbeat atmosphere of the conference call, it's clear that the Wall Street are not satisfied with SOHU's results. We will likely see several negative research reports on SOHU coming out on the morning of Tuesday Feb 6, 2007. The stock will likely be under downward pressure following the earnings report.
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