Baidu Inc (百度), which operates China’s most popular Internet search engine, said its quarterly earnings jumped 48 percent, beating expectations on strong revenue growth.
Baidu earned US$62.7 million, or US$1.80 per share, for the three months ended Dec. 31, compared with US$42.3 million, or US$1.22 per share, a year earlier.
Excluding stock-based compensation expenses, Beijing-based Baidu earned US$1.88 per share in the latest quarter.
Revenue rose 40 percent to US$184.7 million.
On average, analysts polled by Thomson Reuters projected profit of US$1.68 per share on revenue of US$180 million.
The results exceeded Baidu’s expectations and were driven by the success of a new system for advertisers to bid on paid links to search words, chief executive officer Robin Li (李彥宏) said.
“With a solid base of users and customers, our foundation is stronger than ever and we will continue to drive innovation to capture market opportunities ahead,” Li said in a statement.
Chinese Internet companies have seen profits grow even as the global economic crisis hurt China’s exports. Domestic growth and consumer spending have benefited from a 4 trillion yuan (US$586 billion) government stimulus.
Rival Google Inc announced on Jan. 12 that it no longer wanted to cooperate with Chinese censorship and might shut down its China-based site Google.cn.
The company also complained about China-based hacking of its e-mail service.
Industry analysts say that if Google leaves, Baidu should be able to pick up the bulk of its Chinese advertisers. But they say the Chinese service also might suffer if former Google users switch to Baidu and are unsatisfied with its service.
Chinese officials defended the government’s censorship and denied the government was involved in the cyber-attacks.
“We have not factored in any potential material change in the competitive landscape,” Li said in a conference call on the results yesterday, while not mentioning Google by name.
“But what we have seen in the market is that our customers’ and partners’ confidence level in Baidu is certainly higher —- we think we would benefit from that,” he said.
Baidu had 58.4 percent of China’s search market in the fourth quarter, while Google had 35.6 percent, said Analysys International, a Beijing research firm.
Google has steadily gained market share from smaller rivals but has failed to dent Baidu’s lead.
Baidu has begun to expand abroad with the launch of a Japan-based search site in 2007 and said costs related to that service were US$6.3 million for the quarter, which reduced diluted earnings per share by US$0.18.
For the first quarter of this year, Baidu forecast revenue of US$176 million to US$181 million.
Analysts predict revenue of US$170.2 million.
For the year, Baidu’s net income rose 42 percent to US$217.6 million, or US$6.26 per share. Revenue climbed 39 percent to US$651.6 million.
Shares of Baidu rose US$38.14, or 8.8 percent, to US$473.15 in after-hours trading. The stock earlier slid US$8.22 to end regular trading at US$435.01. It has ranged from US$119.65 to US$470.25 over the past year.
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