RockyTurayug的部落格

Summary

• Qihoo 360 reported first quarter earnings Tuesday.
• As anticipated, the business confirmed powerful progress in revenue and smartphone penetration.
• The long thesis is a strong as ever.

Qihoo 360 (NYSE:QIHU) documented very first quarter earnings Tuesday and benefits ended up a little bit combined. Revenue for the quarter came in at $384 million, which is a forty five% increase more than Q1 2014 revenue, and earnings came in at $fifty three million or $.54 a share. Even so, revenue declined 10% from the preceding quarter, which also influenced the firm's earnings which had been down from $76.8 million in internet earnings for This autumn 2014. The inventory originally rose soon after earnings but is using a huge hit Wednesday and is down practically 9% as I compose this. So need to traders be worried about earnings?

Earnings and User Growth

As I explained in the introduction, QIHU's earnings for Q1 2015 was a 45% increase over Q1 2014 revenues, but a 10% decrease from This autumn 2014 revenues. The business mentioned that this quarter-more than-quarter drop was largely because of to &quotsoft organization pattern in internet online games and temporary suspension of online lottery operations starting in March.&quot While this definitely afflicted the firm's earnings for the quarter it is not the only segment of QIHU's income that showed lackluster growth this quarter.

The firm's explanation points out the twenty.1% decrease in web worth-extra services earnings from the prior quarter to this quarter, but does not describe the miniscule boost in online advertising profits of .9% from the prior quarter. To downplay this, QIHU manufactured a passing mention of &quotseasonal headwinds.&quot

I was skeptical at initial but then I dug into the firm's prior financial studies and confident enough in the Q1 2014 report, sequential expansion from on the web advertising income was comparatively flat because of to &quotthe typical consequences of seasonality.&quot In that quarter, complete sequential profits progress was 19.six%, which was pushed by powerful development in the net value-included provider segment. Even so, since of the causes stated previously, expansion in this segment for Q1 2015 was hit tough and so the organization noted a huge sequential decline in profits. It remains to be observed no matter whether on the web lottery functions in China will continue being ceased and it stays to be observed regardless of whether &quotsoft enterprise craze in net video games&quot is a reputable justification possibly way it will be essential for investors to seem at the next quarter earnings report to see how this circumstance performs out.

For the 2nd quarter, the firm guided for income between $435 million and $445 million. Ideally, this is a realistic estimate and the business will return to sort by delivering strong revenue development both yr-more than-12 months and sequentiall 荃灣迷你倉.

Shifting on from income, QIHU ongoing to see powerful development in its 12 months-more than-yr person penetration metrics and in its complete quantity of users. The company documented a user penetration of its Pc-dependent goods of ninety four.7% and an enhance in total consumers of people goods from 479 million in Q1 2014 to 503 million in Q1 2015. In addition, the firm's smartphone person foundation improved from 538 million to 778 million. As predicted, the big difference in the metrics documented between This autumn 2014 and Q1 2015 was considerably less important, but QIHU even now noted sequential increases in all pertinent metrics. These metrics are always important to appear at simply because they provide a sense of how the company's user foundation, which is the source of all revenue, is responding to items and how that user foundation if shifting. From this earnings report, it seems that QIHU continues to preserve a sizeable person foundation that it can continue to monetize.

New Developments

In the 1st quarter, the company launched its re-branded research motor, now called Haosou. Mr. Hongyi Zhou, QIHU's CEO, stated that the business has gained &quotencouraging user recognition and interaction with the new manufacturer and our look for services.&quot QIHU hopes this rebranding will strengthen the firm's image and permit it to acquire share in the net and mobile lookup industry. What result this has on profits and the firm's consumer base remains to be witnessed, but if the move is profitable, it could have positive consequences on the company in the foreseeable future.

QIHU also introduced the finalization of its joint venture with Coolpad and expects to launch a sequence of smartphones below the manufacturer &quotQiKoo&quot inside the year. This joint undertaking can potentially be quite helpful as the smartphones marketed beneath this brand will have QIHU's computer software suite pre-put in. Coolpad is the 3rd-largest smartphone maker by market share in China so this partnership can legitimately provide further profits and end users for QIHU's merchandise that the organization might not have or else been ready to achieve.

Summary

QIHU's sequential revenue decline is not a good growth, but if the company's assistance is any sign this is nothing to fear about. Operating metrics keep on to enhance and the company's person base continues to develop incrementally. New developments for the company search promising and have the potential to draw in added revenue and extra customers. The second quarter will be essential to appear at to see if revenue recovers and if the organization can return to form. Even so, the market's response appears unwarranted and for people traders that like to acquire the drops, correct now might be a excellent possibility to get into QIHU.