Baidu Profit Up 36% on Strong Revenue Growth
First Published Tuesday, 5th February 2013 05:33 am - © 2013 Dow Jones
Baidu Inc.'s (BIDU, K3SD.SG) fourth-quarter earnings rose 36% as the Chinese Internet-search giant posted a double-digit revenue gain.
Baidu, which generates almost all its revenue from search advertising, has posted surging earnings growth in recent years. The company enjoys a comfortable lead in the Chinese search market, where it has overtaken much of Google Inc.'s (GOOG) share since 2010--when Google shifted its local search traffic to Hong Kong following its disagreement with Chinese government officials over online censorship. However, Baidu now faces competition from antivirus company Qihoo 360 Technology Co. (QIHU), which launched its own search engine in August.
"Baidu once again posted solid growth in 2012 amidst challenging macro conditions," said Chairman and Chief Executive Robin Li.
Mr. Li said the company will continue enhance functionality, introduce new products, and step up efforts to push products to users in 2013.
Baidu posted a profit of 2.8 billion Chinese yuan ($448.7 million), or CNY7.99 an American depositary share ($1.28), up from CNY 2.05 billion, or CNY5.87 an ADS, a year earlier. Excluding stock-based compensation, earnings totaled CNY8.18 ($1.31). Analysts polled by Thomson Reuters expected earnings of $1.29.
Total revenue jumped 42% to CNY6.335 billion ($1.017 billion). Baidu in October projected revenue between CNY6.155 billion and CNY6.345 billion.
Online marketing revenue rose 41% to CNY6.288 billion ($1.009 billion). The number of active online marketing customers rose about 31% to 406,000.
Overhead costs were up 52%, while research-and-development costs jumped 70% primarily due to an increase in personnel.
The company forecast first-quarter revenue between CNY5.89 billion ($945.4 million) and CNY6.08 billion ($975.9 million), bracketing the $964 million estimate from analysts.
Conversion rates are based on noon buying rate in New York on Dec. 31 as certified by the Federal Reserve Bank of New York.
American depositary shares were down 2.1% to $105 in recent trading. The stock is down 20% over the past 12 months.
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