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Baidu profit more than doubles

(Bloomberg)
Updated: 2007-04-27 14:04

Baidu.com Inc., China's most-used Internet search site, reported first-quarter profit more than doubled and forecast revenue for the current period that beat analysts' estimates, sending the shares higher.

Net income rose to 85.5 million yuan ($11.1 million), or 2.47 yuan per American depositary receipt, from 35.2 million yuan, or 1.02 yuan, a year earlier, theBeijing-based company said today in a statement. Sales more than doubled to 275.6 million yuan ($35.5 million).

Baidu drew 51 percent more customers in the quarter as companies including Motorola Inc. and Deutsche Bank AG bought more Web ads to market their products in the world's fastest- growing major economy. Chinese search engines may sell $1.4 billion of ads in 2011, 15 times more than the $91 million sold in 2005, according to Credit Suisse Group estimates.

"It really shows you that the China search market is taking off," said Ming Zhao, an analyst at Susquehanna Financial Group in Bala Cynwyd, Pennsylvania. He rates the shares "positive" and doesn't own them. "Heading into the earnings, the Street expectations were pretty negative."

Baidu's ADRs jumped 20 percent to $131 in extended trading after the announcement. If the shares match that advance in regular trading tomorrow, it would be the third-biggest gain since the company first sold shares to the public in August 2005.

The shares rose $4.69, or 4.5 percent, to $109.37 at 4 p.m. in Nasdaq Stock Market trading.

Forecast

The company said sales for the second quarter will be $48.9 million to $50.2 million, which would top the $43.5 million estimated by analysts in a Bloomberg survey. In February, Baidu forecast first-quarter sales of $34 million to $35 million.

Baidu also saidChief Operating OfficerDavid Zhu resigned for personal reasons. He will leave at the end of June.

Profit, excluding some items, was 2.82 yuan per share, or 37 cents, in the first quarter. On that basis, analysts had estimated profit of 36 cents a share on sales of $34.4 million, according to a Bloomberg survey.

Baidu attracted more than 112,000 customers in the quarter, up from 74,000 a year earlier. Revenue per customer in the quarter was about 2,500 yuan ($323.70), little changed from the fourth quarter, the company said.

Baidu had a 58 percent share of the Chinese search market in the fourth quarter, compared with Google's 17 percent and Yahoo! Inc.'s 13 percent, according to Beijing-based researcher Analysys International. China was home to 137 million Web users at the end of 2006, second only to the U.S., according to government data.