By RTT News, October 29, 2013, 08:48:00 PM EDT
(RTTNews.com) - Shares of Baidu, Inc. ( BIDU ) rose nearly six percent in extended trade on Tuesday after the Chinese Internet search giant reported results for the third quarter that topped analysts' expectations. The company also provided revenue forecast for the fourth quarter, well above Street view. However, profit for the quarter edged up only 1 percent from last year, despite a significant increase in expenses, reflecting strong double-digit revenue growth.
"We were pleased to see strong results in the third quarter as revenue remained on a solid growth trajectory. Mobile search revenues in particular continued to grow at an exciting pace as more of our customers recognize the benefits of mobile marketing on the Baidu platform," Chairman and CEO Robin Li said in a statement.
Beijing, China-based Baidu reported net income of RMB3.05 billion or $498.0 million for the third quarter, higher than RMB3.01 billion for the prior-year quarter. Earnings per ADS also grew to RMB8.63 or $1.41, from RMB8.59 last year.
Excluding share-based compensation expenses, earnings per ADS for the latest quarter were RMB9.04 or $1.48. On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of RMB8.65 per share for the quarter. Analysts' estimates typically exclude special items.
Baidu's total revenues for the quarter grew 42.3 percent to RMB8.89 billion or $1.45 billion from RMB6.25 billion in the same quarter last year, and topped twenty Wall Street analysts' consensus estimate of RMB8.81 billion.
Baidu generates majority of its revenues from search-engine advertising. However, competition from other sites and the more popular mobile search has impacted Baidu's ad revenues.
Online marketing revenues grew 41.7 percent to RMB8.85 billion or $1.45 billion from last year, with active online marketing customers growing 19 percent to about 464,000. Revenue per online marketing customer improved 19.4 percent to about RMB19,100 or $3,121.
"I am proud of the progress we made during the quarter. Our flagship mobile products like search and maps continue to gain momentum. We solidified our mobile native app distribution capabilities with the 91 Wireless acquisition. And we introduced search-enabled Light Apps, which will allow users to more easily discover long tail app content, and will offer developers a powerful distribution channel in Baidu mobile search," Li added.
Operating profit for the quarter grew 1.2 percent to RMB3.34 billion or $545.4 million from the year-ago quarter.
Selling, general and administrative expenses surged 115.4 percent to RMB1.38 billion or $226.2 million from last year, primarily due to promotional expenses for mobile products.
Research and development expenses also surged 77.5 percent to RMB1.09 billion or $178.2 million from a year ago, primarily due to an increase in the number of research and development personnel.
Looking ahead to the fourth quarter, Baidu expects revenue in a range of RMB9.22 billion to RMB9.48 billion, or $1.507 billion to $1.549 billion. Analysts expect the company to report revenues of RMB8.90 billion for the quarter.
"Our focus on investment continues, and we are now seeing real returns, particularly in mobile user adoption and in monetization. In the quarters ahead, we will continue to invest aggressively in order to position ourselves well in this rapidly developing mobile market," CFO Jennifer Li noted.
BIDU closed Tuesday's regular trading session at $159.41, up $5.29 or 3.43% on a volume of 6.29 million shares. The stock soared a further $9.09 or 5.70% in the after-hours trading.
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