Tags: Baidu | Profit | China | Qihoo

Baidu Profit Misses Estimates as Competition Rises

Monday, 29 Oct 2012 06:50 PM

Baidu Inc., owner of China’s most-used search engine, posted third-quarter profit that missed analysts’ estimates as it faced competition from Qihoo 360 Technology Co., maker of China’s most-used Web browser.

Net income climbed to 3.01 billion yuan ($480.5 million), or 8.59 yuan per American depositary receipt, from 1.88 billion yuan, or 5.38 yuan, a year earlier, Beijing-based Baidu said in a statement Monday. That missed the 2.77 billion-yuan average of analysts’ estimates compiled by Bloomberg.

Chief Executive Officer Robin Li has extended Baidu’s lead over Google Inc. in China since January 2010, when the U.S. company said it would no longer comply with local censorship rules. Baidu’s almost 80 percent share of China’s search-engine market by revenue was challenged in August this year when Qihoo introduced a search engine in an effort to boost sales.

“Given the cautious sentiment and continuing noise about disruption from Qihoo’s search service, we believe Baidu’s share price is likely to remain under some pressure near-term,” Alicia Yap, a Hong Kong-based analyst at Barclays Plc, wrote in an Oct. 24 report.

Baidu shares were closed for trading Monday due to the hurricane on the U.S. East Coast. Baidu closed at $113.84 in New York on Oct. 26, and has declined 2.3 percent this year.

In-Line Revenue

Revenue rose 50 percent to 6.25 billion yuan from 4.18 billion yuan. Analysts were projecting sales of 6.23 billion yuan, based on the average of 15 estimates compiled by Bloomberg.

Fourth-quarter revenue will range from 6.16 billion yuan to 6.35 billion yuan, Baidu said. That compares with the 6.41 billion-yuan average of analysts’ estimates compiled by Bloomberg.

Baidu accounted for 78.6 percent of China’s search-engine market by revenue in the third quarter, compared with 15.4 percent for Google, according to Beijing-based researcher Analysys International.

Qihoo had little impact on market share by revenue, and wasn’t ranked among the top four engines in China by that measure, Analysys said.

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Baidu Inc., owner of China's most-used search engine, posted third-quarter profit that missed analysts' estimates as it faced competition from Qihoo 360 Technology Co., maker of China's most-used Web browser.
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