logo
Plus   Neg
Share
Email

Baidu Shares Soar 14% As Q2 Results Top Estimates, Rosy Outlook

Shares of Baidu, Inc. (BIDU) soared 14 percent in extended trade on Wednesday after the Chinese Internet search giant reported results for the second quarter that topped analysts' expectations. The company also provided revenue forecast for the third quarter, well above Street view. However, profit for the quarter declined from last year, reflecting a significant increase in expenses.

"We made solid progress in the second quarter, adding a record 58,000 online active customers. The adoption of our mobile platform gained momentum and mobile monetization improved. Mobile revenues for the first time accounted for over 10% of our total revenues this quarter," Chairman and CEO Robin Li said in a statement.

Beijing, China-based Baidu reported net income of RMB2.64 billion or $430.8 million for the second quarter, down from RMB2.77 billion for the prior-year quarter. Earnings per ADS also declined to RMB7.52 or $1.22, from RMB7.86 last year.

Excluding share-based compensation expenses, earnings per ADS for the latest quarter were RMB7.75, or $1.26. On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $1.21 per share for the quarter. Analysts' estimates typically exclude special items.

Baidu's total revenues for the quarter grew 38.6 percent to RMB7.56 billion or $1.23 billion from RMB5.46 billion in the same quarter last year, and topped sixteen Wall Street analysts' consensus estimate of $1.20 billion.

Baidu generates majority of its revenues from search-engine advertising. However, competition from other sites and the more popular mobile search has impacted Baidu's ad revenues.

Online marketing revenues grew 38.3 percent to RMB7.54 billion or $1.23 billion from last year, with active online marketing customers growing 33 percent to about 468,000. Revenue per online marketing customer improved 3.9 percent to about RMB16,100 or $2,623.

"Our recent investments have further strengthened Baidu's position in key strategic areas such as search, LBS, app distribution and online video. Our market-leading technology, innovative new products and unrivaled customer value proposition will keep us at the heart of the Internet in China," Li added.

Operating profit for the quarter grew 3.2 percent to RMB2.90 billion or $473.1 million from the year-ago quarter.

Selling, general and administrative expenses surged 83.5 percent to RMB1.08 billion or $175.7 million from last year, primarily due to expenses related to the promotion of our products.

Research and development expenses also surged 72.6 percent to RMB941.8 million or $153.4 million from a year ago, primarily due to an increase in the number of research and development personnel.

Looking ahead to the third quarter, Baidu expects revenue in a range of RMB8.73 billion to RMB8.96 billion, or $1.422 billion to $1.460 billion. Analysts expect the company to report revenues of $1.35 billion for the quarter.

"We are encouraged to see clear progress in key investment areas. We will continue to invest aggressively and remain committed to building long-term value for our shareholders," CFO Jennifer Li noted.

BIDU closed Wednesday's regular trading session at $113.37, up $3.53 or 3.21% on a volume of 7.54 million shares. The stock soared a further $15.72 or 13.87% in the after-hours trading.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Alphabet's subsidiary Loon LLC has secured its first commercial deal - to deliver 4G internet access to remote areas of Kenya using high-altitude balloons. Loon will partner with Telkom Kenya to deliver connectivity to parts of Kenya. Telkom Kenya announced Thursday that it has signed a definitive agreement with Loon to pilot a new 4G/LTE access network service in Kenya. The Cow Calendar era is coming to an end. Chick-fil-A said it is axing one of its well-loved products, the Cow Calendar. The 2018 Cow Calendar will be the chicken chain's last calendar. Chick-fil-A first launched the Cow Calendar in 1998 that featured cows as a new tool to convince people to eat more chicken. The calendars were popular not just for the pictures of funny Chick-fil-A cows. Japanese telecom giant Nippon Telegraph and Telephone or NTT has filed a patent for a blockchain technology-based new contract agreement method. NTT, the world's fourth-largest telecom provider, explains the ways to use the application to store contracts without tampering documents.
Follow RTT