Baidu profit beats estimates as company wins users
Updated: 2008-02-14 15:52
Baidu.com Inc, operator of China's most used Internet search site, reported profit and sales that topped analysts' estimates after services to find celebrity news and videos helped attract users from Yahoo! Inc.
Fourth-quarter net income rose 79 percent to 219.8 million yuan ($30.5 million), or 6.32 yuan per American depositary receipt, from 122.8 million yuan, or 3.54 yuan per ADR, a year earlier, Baidu said in a statement. Sales more than doubled to 571.1 million yuan.
Chief executive officer (CEO) Robin Li lured visitors away from Yahoo and Sohu.com Inc, extending Baidu's lead in a market that's home to 210 million online users. The company today forecast sales this quarter may double as user gains counter Web traffic disrupted by the country's worst snowstorms in 50 years.
"People tend to travel during the Chinese New Year holiday and that will cut Internet traffic," JPMorgan Securities Inc analyst Dick Wei, who called the fourth-quarter results "respectable." The snowstorm "also hurt traffic as a result of power failure or infrastructure damage."
Wei rates Baidu stock "overweight."
Analysts had estimated its fourth-quarter profit of 184.1 million yuan, according to the average of seven estimates compiled by Bloomberg. They projected sales of 548.3 million yuan, based on 12 estimates.
Baidu rose as much as 7.2 percent to $280 in US after-hours trading following the earnings announcement. The ADRs, which each represent one Class A share, climbed $15.66 to $261.09 today in regular Nasdaq Stock Market trading.
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