Thursday evening, Baidu.com Inc. (BIDU), a Chinese language Internet search provider, announced an 86.7% surge in its net income for the second quarter as revenues doubled. Meanwhile, the company issued third quarter revenues outlook.
Second Quarter Results
The Beijing, China-based Baidu.com reported net income of RMB265.0 million or $38.6 million, up 86.7% from RMB142 million and earnings increased to RMB7.62 or US$1.11 per share from RMB4.09 per share in the same quarter last year. Excluding stock-based charges, earnings were RMB8.46 or US$1.23 per share for the latest quarter.
On average, 14 analysts polled by First Call/Thomson Financial predicted the company to report earnings of US$0.98 per share.
Total revenues doubled to RMB802.6 million or US$117.0 million from RMB400.65 million in the previous year quarter. Twelve Wall Street analysts had a consensus revenue estimate of US$112.53 million.
Traffic acquisition costs or TAC as a component of cost of revenues were RMB101.7 million or US$14.8 million, and accounted for 12.7% of total revenues versus 11.2% in the corresponding period last year. The company attributed the higher TAC to the continued growth of revenue contribution from Baidu Union members.
Online marketing services yielded revenues of RMB802.2 million or US$117.0 million, while other services revenues slipped to RMB428 thousand from RMB606 thousand in the prior year quarter. Baidu.com attributed the growth in online marketing services to increased number of active online marketing customers and revenue per customer. The company had more than 181 thousand active online marketing customers, indicating 41.4% increase from the 2007-second quarter level.
The company stated that revenue per online marketing customer rose sequentially to about RMB4,400 or US$641 and was up by about 41.9% from the prior year quarter.
Selling, general and administrative costs climbed 85.9% to RMB174.2 million or US$25.4 million due to expansion of the direct sales force. Research and development costs more than doubled to RMB71.1 million or US$10.4 million on higher research and development staff.
Operating profit more than doubled to RMB276.3 million or US$40.3 million, while operating profit, excluding stock-based compensation charges, jumped 121.7% to RMB305.6 million or US$44.6 million.
The company closed the quarter with cash, cash equivalents and short-term investments of RMB1.79 billion or US$237.6 million.
Commenting on the results, the company's chairman and CEO Robin Li said, "Our ability to make such progress was due to the appreciation of paid search by our loyal small and medium sized enterprise customers as well as a growing appreciation of search engine marketing by large enterprises in China. The scalability of our business, aided by increasing numbers of large enterprise customers, helped Baidu post record results this quarter, despite some impact from the devastating earthquake this past May."
Expectations
Moving ahead, Baidu.com sees total revenues in the range of RMB905-RMB935 million or US$132-US$136 million for the third quarter. The revenue outlook represents 82%-88% growth over the 2007-third quarter and 13%-16% from the most recent quarter. Street analysts have consensus revenue projection of $135.26 million.
Stock Movement
Shares of Baidu.com reached a year high of $429.19 and a low of $161.00. During the day, the stock ranged between $287.10 and $299.00 before closing down by $3.66 or 1.25% at $288.7. But in the extended hours trading, the stock reversed the trend and gained $35.71 or 12.37% at $324.41.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.