DOW JONES NEWSWIRES
Baidu Inc.'s (BIDU) third-quarter earnings jumped 42% as the
Chinese Internet company continued to gain traction with its new
Phoenix Nest online-marketing system.
However, the company disappointed with its fourth-quarter
revenue projection of $174 million to $180 million, well below the
$205 million expected by Wall Street. Baidu cited the temporary
effect of the old marketing system's discontinuation.
That outlook sent Baidu's American depositary shares plunging
11% to $385.03 in after-hours trading. The stock, having nearly
quadrupled in value since mid-December, hit a 52-week high of
$439.90 earlier Monday.
"With 70% of customers already using Phoenix Nest, we believe
this is the right time to complete the switch to the new system,"
Chairman and Chief Executive Robin Li said. "The move to a single
upgraded bidding platform will more efficiently utilize company
resources and relieve customers from the burden of maintaining two
systems."
Baidu, the dominant player in China's Internet-search market,
has fended off worries about an advertising downturn with the
aggressive rollout of the advertising system. The company has grown
by leaps and bounds over the past few years but is starting to see
inroads from Google Inc. (GOOG) and Alibaba.com Ltd.'s (1688.HK)
Taobao.com.
Baidu reported earnings of CNY492.9 million ($72.2 million), or
CNY14.14 ($2.07) per American depositary share, compared with
CNY347.9 million, or CNY10 per ADS, a year earlier. Analysts polled
by Thomson Reuters projected earnings of $1.83 an ADS.
Revenue surged 39% to CNY1.28billion ($187.3 million). In July,
the company expected revenue of $184 million to $189 million,
topping Wall Street estimates at the time.
Active online-marketing customers increased 11% to about
216,000, as revenue per customer grew 26%.
-By Jay Miller, Dow Jones Newswires; 212-416-2355;
jay.miller@dowjones.com