China's Baidu outpaces Street targets as mobile revenue surges
SAN FRANCISCO (Reuters) - Baidu Inc, China’s biggest Internet search company, blew past Wall Street's targets with a 34.1 percent jump in quarterly net profit, helped by a surge in mobile revenue.
It shares climbed 7.3 percent in after-hours trading to $219.20, from a close of $204.27 on the Nasdaq.
On Thursday, the company often likened to a Chinese Google said it now gets 30 percent of its revenue from mobile services, up from around 20 percent in previous quarters, as online advertisers migrate to mobile devices.
Net income attributable to shareholders rose to 3.55 billion yuan ($571.7 million) in the three months ending June from 2.64 billion yuan a year ago, beating analyst estimates of 2.82 billion yuan, according to Thomson Reuters SmartEstimate.
Revenues for the second quarter rose 58.5 percent to 11.986 billion yuan from 7.56 billion yuan a year earlier, in line with Baidu’s own forecasts of between 11.82 billion yuan and 12.11 billion yuan.
Baidu had struggled to keep up with rivals on mobile devices such as smartphones as they invest in an array of apps to keep users engaged. It is also grappling with intensified competition on its own search turf from the likes of Qihoo 360 Technology Co Ltd and Sohu.com Inc’s Sogou search engine, which is 36.5 percent owned by Tencent Holdings.
Tencent, China’s biggest social networking company, dominates smartphone screens with its mobile messaging app WeChat, which had 396 million monthly active users globally as of the end of March.
Also challenging Baidu, e-commerce titan Alibaba Group Holding Ltd [IPO-BABA.N] said in June it would fully acquire mobile browser firm UCWeb.
In April, UCWeb and Alibaba jointly launched their own mobile search engine: Shenma, a play on words meaning ‘what?’ in Chinese.
($1 = 6.1944 Chinese yuan)