Changyou.com (CYOU) Posts Surprise Q3 Profit, CEO Resigns, Q4 Revenue Guidance Falls Short

Changyou.com (NASDAQ: CYOU) reported Q3 EPS of $0.07, $0.13 better than the analyst estimate of ($0.06). Revenue for the quarter came in at $180.8 million versus the consensus estimate of $188.32 million.

Sohu also announced that Mr. Tao Wang has resigned as Changyou's Chief Executive Officer for personal reasons. Changyou's Board of Directors has appointed Ms. Carol Yu, President and CFO of Sohu.com Inc., and Mr. Dewen Chen, Changyou's President, to be Co-CEOs. Ms. Yu will maintain her position as President and CFO of Sohu in addition to her new role with Changyou. Mr. Wang will continue to serve as a Director of Changyou.

Business Outlook

For the fourth quarter of 2014, Sohu estimates:

• Total revenues to be between US$442 million and US$462 million.(Consensus is $464 million)
• Brand advertising revenues to be between US$145 million and US$150 million; this implies a sequential decrease of 3% to a sequential increase of 1% and an annual increase of 18% to 22%.
• Sogou revenues to be between US$118 million and US$123 million; this implies a sequential increase of 11% to 16% and an annual growth of 68% to 75%.
• Online game revenues to be between US$155 million and US$165 million; this implies a sequential increase of 3% to 10% and an annual decrease of 4% to 10%.
• Guidance on Non-GAAP net income, Non-GAAP fully diluted earnings per ADS, and share-based compensation expense for the fourth quarter of 2014 will not be provided at this time, as there are uncertainties as to expected costs and expenses associated with mobile games launched, expected to be launched, and currently in development.

For earnings history and earnings-related data on Changyou.com (CYOU) click here.

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