Chinese internet search provider Baidu, Inc. (BIDU: Quote), Thursday said its profit more than doubled in the third quarter, helped essentially by robust growth in online marketing revenue. Looking ahead, Baidu provided its revenue forecast for the fourth quarter, which is expected to come in above Wall Street estimates.
The Beijing, China-based company's third quarter net income rose to RMB 1.047 billion or RMB 3.00 per share from RMB 492.86 million or RMB 1.41 per share in the same quarter a year ago. On a non-GAAP basis, net income was RMB 3.07.
In US dollars, Baidu's net income for the quarter was $156.4 million or $0.45 per ADS for the quarter with non-GAAP net income at $0.46 Per ADS.
On average, fourteen analysts polled by Thomson Reuters expected earnings of $0.41 per share for the quarter. Analysts' estimate typically excludes one-time items.
Total revenues increased 76.4% to RMB 2.256 billion, helped by a strong 76.5% growth in online marketing revenues at RMB 2.256 billion. In US dollars, Baidu's revenue for the quarter was $337.2 million, with online marketing revenue at $337.1 million. Wall Street expected revenues of $333.26 million.
Baidu, often called as the Google of China, captured majority of the 338 million Chinese internet users following the recent standoff between internet giant Google and Chinese government over the issue of web censorship. Annual revenue of Google from china is estimated to be around $600 million.
Online marketing customers of Baidu has increased 25% to 272,000 from the prior year quarter and 7.1% from the sequential quarter.
The company's revenue per online marketing customer jumped 40.7% to RMB 8,300 or $1,241, while the increase was 10.7% sequentially.
Traffic acquisition cost represented 8.9% of total revenues, while Bandwidth costs represented 3.8% of total revenues.
Selling, general and administrative expenses were RMB 296.2 million or $44.3 million, representing an increase of 49.8% primarily due to increased headcount costs and marketing expenses.
Research and development expenses were RMB 204.7 million or $30.6 million, a 75.4% increase from the corresponding period in 2009.
Jennifer Li, Baidu's chief financial officer, commented, "We are pleased to have delivered record margins in the third quarter, even as we actively invested in sales and marketing, R&D and network equipment. Looking forward, we will continue to invest aggressively to support Baidu's long-term growth."
As of September 30, 2010, the company had cash, cash equivalents and short-term investments of RMB 6.938 billion or $1.037 billion.
Looking ahead to the fourth quarter, Baidu expects to generate total revenues in a range of RMB 2.370 billion - RMB 2.440 billion or $354.2 million - $364.7 million. Street analysts expect revenues of $348.53 million for the quarter.
BIDU closed Thursday's regular trading at $102.48, up $2.47 or 2.47%, on a volume of 19.08 million shares. In after-hours, the stock further gained $2.55 or 2.52%, trading at $104.50. In the last 52-week period, the stock traded in a range of $35.30 - $107.19, with a three-month average volume of 10.69 million shares.
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by RTT Staff Writer
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