Baidu.com, Inc. (NASDAQ:BIDU), Chinese search provider, reported a 48.1 percent year over year increase in profit to $524.6 million for the third quarter. Company’s revenues for the quarter rose by 49.7 percent year over year to $994.6 million
“During the quarter, we worked to improve user experience by more closely integrating Baidu’s suite of market-leading vertical products with Web search,” CEO Robin Li said in a statement announcing the results. “Mobile and cloud represent our vision for the future of China’s Internet, and Baidu.com, Inc. (NASDAQ:BIDU) will continue to proactively drive the development of this crucial ecosystem. We stand ready to meet the challenges and capture the opportunities the PC-to-mobile transition presents”.
For the last quarter, company reported an $859 million in revenue and $1.26 in earnings per share, which exceeded analyst expectations with a 60 percent increase in revenue and a 51 percent jump in profit. Despite a reduction, in spending by its big advertising customers, Baidu added a record number of advertisers in the third quarter and now had total 390,000 active online marketing customers.
Baidu.com, Inc. (NASDAQ:BIDU) has dominated China’s search market since Google Inc (NASDAQ:GOOG) relocated its search engine to Hong Kong in a row over censorship in 2010. Baidu enjoys a near 80 percent market share and plans to invest $1.6 billion into a cloud data center. Company also achieved a significant milestone this fall when Apple Inc. (NASDAQ:AAPL) added support for Baidu’s search engine to iOS 6.
Company reported its slowest quarterly revenue growth in more than two years and expects a mild growth this quarter, hurt by weaker sales. Wall Street, however, was less than enthusiastic about Baidu’s fourth quarter guidance, which predicts between $979.3 million to $1.010 billion in profit
“Their large customers’ spending has not been so robust and has been quite flat, but Baidu.com, Inc. (NASDAQ:BIDU) has done a decent job of bringing new customers online,” said Michael Clendenin, managing director of technology consultancy firm RedTech Advisors.
For the past quarter, company’s shares have seen some fluctuations as investors were concerned about increasing competition in the Chinese search market. Qihoo 360 Technology, China’s top anti- virus software firm, launched a search engine in August and has already gained 5-10 percent of search traffic since its launch, according to data from research firm Analysys International.
“It’s been one of these emotional hangovers on the (Baidu) stock but the reality is Qihoo is not monetizing and won’t be monetizing probably until Q1 and even then it will be at a very small base,” Clendenin said.
Baidu.com, Inc. (NASDAQ:BIDU) shares have lost 2 percent this year on expectations of slower economic growth in China, underperforming a 14 percent rise on the NASDAQ exchange. As of Monday, Baidu’s stock was trading at $113.84 a share, down almost 10 percent over the past three months.