the latest earnings summary report with ceo robin li's comments during the company conference call just completed!
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(Adds comment on sales forecast in ninth paragraph,
finance chief role in 11th.)
By John Liu
Feb. 14 (Bloomberg) -- Baidu.com Inc., operator of China's
most used Internet search site, reported profit and sales that
topped analysts' estimates after new services helped win users
from rival Yahoo! Inc. The shares rose in extended trading.
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 today in a statement. Sales more than
doubled to 571.1 million yuan.
Chief Executive Officer Robin Li lured users away from
Yahoo and Sohu.com Inc. in the second-largest Internet market
by introducing services for finding celebrity news, financial
data and online videos. Baidu started a service in Japan and
plans to open a consumer trading site this year to compete with
Alibaba.com Corp.
``Baidu is the dominant search company in China, and no
rival is near to overtaking them,'' Eric Wen, an analyst at BNP
Paribas in Shanghai, said before the announcement. He advises
investors to buy the shares. ``That Baidu, with this lead, is
also looking at how to expand and improve its business says a
lot about their company culture.''
Analysts had estimated 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.
Market Share
Baidu rose $12.88, or 4.9 percent, to $273.97 in U.S.
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.
Baidu's share of the Chinese search market rose to 60
percent in the fourth quarter from 58 percent a year earlier,
according to Analysys International. Google Inc.'s share
climbed to 26 percent from 17 percent, while Yahoo's fell to
9.6 percent from 13 percent. Sohu's share dropped to 1.2
percent from 5 percent, the Beijing-based research firm said.
The company expects first-quarter sales of 533 million
yuan to 548 million yuan, according to the release. The average
estimate of seven analysts surveyed by Bloomberg was 566.7
million yuan.
``First quarter sales will be affected by the snowstorms
and the holidays,'' CEO Li said on a conference call today.
Internet ``traffic typically goes down quite a lot during the
Chinese New Year holidays.''
The worst snowstorms in 50 years clogged travel in China
before the Lunar New Year. More than three weeks of storms
knocked out power to half the nation's provinces and closed
road, rail and air routes.
Finance Role
Shen Haoyu, vice president of business operations, will
oversee the company's financial operations until a replacement
for Chief Financial Officer Shawn Wang is found, Li said. Wang
died on Dec. 27 in an accident in China.
China added 73 million Internet users in 2007, increasing
its tally to 210 million, second only to the U.S., according to
the government-backed China Network Information Center.
Development spending in the fourth quarter more than
doubled to 46.5 million yuan after the company added workers,
Baidu said. Sales and administrative expenses rose 86 percent
to 132.2 million yuan as Baidu expanded its direct sales staff.
Yahoo, which rejected a takeover bid from Microsoft Corp.
this week, became Alibaba's single biggest shareholder in 2005.
Alibaba owns China's biggest trading Web sites for individuals
and businesses.
Baidu plans to introduce a service in 2008 that will
compete for users with Alibaba's Taobao.com, a Web site where
individuals sell goods to one another. Alibaba.com Corp. is the
parent of Hong Kong-listed Alibaba.com Ltd.
Baidu's Li said the company is ``open to all kinds'' of
share-listing options, though it's ``unlikely'' the company
will sell stock in Hong Kong in 2008.
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