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Qihoo Shares Rise On Better-than-expected Q3 Results, Revenue Outlook

Shares of Qihoo 360 Technology Co. Ltd. (QIHU: Quote), a China-based provider of Internet and mobile security products, gained more than 5 percent in extended trade Monday after the company reported better than expected results for the third quarter. Looking ahead, the company forecast revenue for the fourth quarter and fiscal 2012 above analysts' estimates.

Qihoo's profit for the third quarter increased 18 percent on double-digit revenue growth.

Hongyi Zhou, Chairman and Chief Executive Officer of Qihoo said, "The third quarter of 2012 marks our seventh straight quarter of robust revenue growth since the Company's IPO last year. We continue to outperform the growth rate of the industry, despite the macro economic challenges that persist in the market."

Total monthly active users of Qihoo's products and services reached 442 million in September 2012, compared to 370 million in the same period last year. Average daily unique visitors to the 360 Personal Start-up Page and its sub-pages were 89 million in the quarter, compared to 55 million in the prior-year period.

Qihoo's third-quarter net income was $12.93 million or $0.11 per ADS, up from $10.90 million or $0.09 per ADS in the year-ago quarter.

Excluding share-based compensation, net income rose to $24.23 million or $0.20 per ADS from $19.55 million or $0.16 per ADS in the prior-year quarter. On average, seven analysts polled by Thomson Reuters expected the company to earn $0.16 per ADS for the quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter jumped 77 percent to $84.04 million from $47.49 million in the same period last year, reflecting continued robust growth in both online advertising and Internet value-added services. Analysts had a consensus revenue estimate for the quarter of $81.59 million.

Online advertising revenues grew 66 percent from last year to $58.4 million, reflecting further market penetration of the company's key products such as the 360 browsers and Personalized Start-up Pages, and increased user activity.

Internet value-added service revenues, which are mainly derived from web game operations, more than doubled to $25.5 million.

Looking ahead to the fourth quarter, Qihoo forecasts revenue between $93 million and $94 million, representing a year-over-year increase of 49 percent to 51 percent.

For fiscal year 2012, Qihoo expects revenues in a range of $319 million to $320 million, representing a year-over-year increase of about 90 percent.

Analysts currently expect the company to record revenue of $91.29 million for the fourth quarter and $315.51 million for the year.

QIHU closed Monday's regular trading at $23.70, up $0.72 or 3.13 percent on a volume of 2.76 million shares. In after-hours, the stock further gained $1.28 or 5.40 percent to $24.75.

by RTT Staff Writer

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