Baidu, Inc. (NASDAQ: BIDU) is managing to keep its growth track on the same path as the investor path if the after-hours reaction is any true barometer of how investors will treat the stock ahead. The Chinese language Internet search provider reported its fourth quarter earnings and gave guidance for the coming quarter. All figures have been changed into dollar terms for US investors and due to the fixed currency exchange rates in China. Some of the growth figures are actually showing an acceleration rather than a tapering off.
Its fourth quarter revenue was up 94.4% t0 $371.3 million. Operating profit in the quarter grew by about 175% to $193.2 million) and net income grew about 171% to $175.9 million. The report was listed as $0.50 per ADS, or $0.52 EPS outside of items. Thomson Reuters had estimates of $0.46 EPS and $360.82 million in revenues.
Baidu expects for the quarter revenues to be $360.6 to $371.2 million, which would generate growth of 83.9% to 89.3% from the first quarter of 2010. Thomson Reuters has estimates of $354.06 million in revenues.
Baidu had about 276,000 active online marketing customers in the fourth quarter of 2010, which was up about 23.8% year over year and up about 1.5% from the third quarter. Revenue per online marketing customer was up approximately 56% to $1,348 from the 2009 fourth quarter and up 7.2% sequentially. The company plans to further integrate search with online e-commerce and social networking.
Traffic acquisition cost as a component of cost of revenues was $30.2 million, about 8.1% of total revenues. That is down from 16% in fourth quarter of 2009 and down from 8.9% the prior quarter. The company noted that the decrease in TAC as a percentage of total revenues reflects a continued impact of its traffic optimization efforts from previous quarters. Bandwidth costs also fell to 4.0% of total revenues.
As of December 31, 2010, Baidu’s cash and cash equivalent investments came to $1.236 billion. Shares closed up 1.96% at $108.63 and shares are up 8% at $117.25 in the after-hours. Mark that as a new all-time high. The prior 52-week trading range was $40.67 to $115.04.
The Chinese internet keeps growing, and Baidu has close to the lion’s share of the search.
JON C. OGG
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