(By Salman - iStockAnalyst Writer)Baidu Inc. (NASDAQ:
BIDU), the leading Chinese language Internet search provider, is scheduled to report third-quarter financial results after the market close on Monday, October 26, 2009. Analysts, on average, expect the company to report earnings of $1.78 a share on revenue of $187.55 million. In the year ago quarter, the company reported earnings of $1.47 per share on revenue of $135.4 million.
Baidu, Inc. provides Chinese language Internet search services primarily in the People's Republic of China and Japan. The company offers a Chinese language search platform that enables users to find online information, such as Web pages, news, images, and multimedia files. China surpassed the United States in 2008 as the world's top user of the Internet. China's Internet users have even outnumbered the US population and at the end of June 2009, there were 338 million internet users in China, according to a research by the government-sanctioned China Internet Network Information Center.
The Beijing, China-based Baidu's second quarter net income jumped to RMB 383.3 million or US$56.1 million, up 44.6% from RMB 264.99 million or US$38.6 million in the same quarter last year. Earnings on a per share basis were RMB 11.02 or US$1.61, compared to RMB 7.62 or US$1.11 in the year ago quarter. Quarterly revenue soared 36.7% to RMB 1.1 billion or US$160.7 million, from RMB 802.2 million or US$117.0 million in the comparable quarter last year. Analysts, on average, expected the company to earn US$1.44 per share on revenue of US$157.82 million for the quarter. Operating profit was RMB 422 million or US$61.9 million, up 53.0% from the corresponding period in 2008.
The company had more than 203,000 active online marketing customers in the second quarter of 2009, representing a 12.2% increase from the corresponding period in 2008 and a 9.7% increase from the previous quarter. Online marketing revenues for the quarter were RMB 1.096 billion or US$160.6 million, an increase of 36.7% from the corresponding period in 2008.
Baidu expects to report revenues in the range of RMB 1.26 billion - RMB 1.29 billion or US$184 million - US$189 million.
Baidu dominates china's online search market followed by Google in a distant second place. Google.com was the first choice search engine for just 12.7 percent of the users in China at the end August, a significant 3.9 percent drop since last year when it managed 16.6 percent according to data from the China Internet Network Information Center, the government domain registration agency. Meanwhile, the local search engine Baidu managed to grow by 0.3 percent to reach 77.2 percent of the market.
The company is also seeking to increase its presence in rapidly expanding mobile search market. The internet search provider recently announced that it has entered into a strategic partnership with China Unicom (Hong Kong) Limited (NYSE:
CHU) to provide wireless search for China Unicom's 3G mobile subscribers. Baidu services including its Internet search, free music download search, and message forum will all be pre-installed on 3G handsets from China Unicom. Baidu services are also embedded in a value-added services platform run by China Telecom, another carrier. Google's main mobile search deal in China is with China Mobile, whose music and application platform uses Google search. According to Beijing-based research company Analysys International, Chinese mobile users performed over 270 million Web searches on their phones in the second quarter this year. Currently, both Google and Baidu are tied with a market share of about 26 percent each.
In terms of stock performance, Baidu shares are up over 200% since the beginning of the year. Shares of the company rose $14.97 or 3.78% to $410.76 in morning trade on Monday.
Disclosure: Author doesn't own any of the stocks discussed here.
