Boston, MA 10/03/2014 (wallstreetpr) – Qihoo 360 Technology Co Ltd (NYSE:QIHU) stocks posted gains of more than 5% on Thursday’s trading session after the company announced its share repurchase plan. The Board of Directors of Qihoo has approved $200 million share repurchase program. The share repurchase can be made through open market or in privately negotiated transactions as per the market conditions and SEC requirements. The funding of Qihoo’s share repurchase plan will be done through existing cash reserves and present cash flow. Qihoo reported cash and cash equivalents of approximately US$787 million as of June 30, 2014. It raised funds of about $1 billion by launching a convertible bond offering in August 2014.
The management view
Mr. Hongyi Zhou, Chairman and the CEO of Qihoo 360 Technology Co Ltd (NYSE:QIHU), said that share repurchase plan is the best alternative to increase the value for shareholders in the long-term. It is the effective utilization of the cash reserves. The cash generation from the business operations will fund the process of ongoing business expansion. Zhou further added that Qihoo is confident of the planned business strategies. He expects the short-term and long-term growth prospects intact and will be achieved as per the plans.
The financial performance
Qihoo 360 Technology Co Ltd (NYSE:QIHU) us facing intense competition from internet peers in China including Baidu Inc (ADR)(NASDAQ:BIDU) and Tencent Holdings Ltd. The financial results for 2Q2014 were better than the market expectations, but higher spending resulted into lower profit margins. The revenues came at $317.9 million comparable to $151.7 million in 2Q2013. The net margin came at 12.3% comparable to 21.8% in 2Q2013. The net income came at $39.1 million comparable to $33.0 million in 2Q2013. Also, Qihoo released a new report on mobile games market in China which states that mobile game market is expected to grow by 75% to 26 billion in 2014 compared to growth of 83% in the first-half of the year. It expects the industry to grow by 42% in 2015.
