Baidu Earnings (BIDU) Upside Quarter Huge Move up After Hours
Date: 7/25/2011
Second Quarter 2011 Highlights
Total revenues in the second quarter of 2011 were RMB3.415 billion ($528.4 million), a 78.4% increase from the corresponding period in 2010.
Operating profit in the second quarter of 2011 was RMB1.858 billion ($287.5 million), a 91.2% increase from the corresponding period in 2010.
Net income in the second quarter of 2011 was RMB1.633 billion ($252.6 million), a 95.0% increase from the corresponding period in 2010. Diluted earnings per ADS(2) for the second quarter of 2011 were RMB4.67 ($0.72); diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) for the second quarter of 2011 were RMB4.77 ($0.74).
"Baidu had another excellent quarter, as we benefited from strong traffic growth and improved monetization," said Robin Li, chairman and chief executive officer of Baidu. "We were especially encouraged with the strong spending from large customers, highlighting the increased value they saw from their marketing spend on Baidu."
"We continued to see strong momentum and product integration from our Box Computing open data and application platforms during the quarter," Mr. Li continued. "Our position at the center of China's Internet ecosystem enables Baidu to benefit from key trends such as the growth of e-commerce. Looking ahead, I am confident that Baidu's emphasis on innovation and execution will help us continue to attract and retain users and customers."
Jennifer Li, Baidu's chief financial officer, commented, "Our top and bottom line results grew strongly again this quarter, with healthy increases in overall traffic and paid click growth. We will continue to accelerate our investments in strategic areas, R&D, network infrastructure and bringing new talents on board to drive long term growth."
Second Quarter 2011 Results
Baidu reported total revenues of RMB3.415 billion ($528.4 million) for the second quarter of 2011, representing a 78.4% increase from the corresponding period in 2010.
Online marketing revenues for the second quarter of 2011 were RMB3.414 billion ($528.3 million), representing a 78.4% increase from the corresponding period in 2010. Baidu had approximately 298,000 active online marketing customers in the second quarter of 2011, representing a 17.3% increase from the corresponding period in 2010 and an 8.8% increase from the previous quarter. Revenue per online marketing customer for the second quarter was approximately RMB11,500 ($1,779), a 53.3% increase from the corresponding period in 2010 and a 29.2% increase from the previous quarter.
Traffic acquisition cost (TAC) as a component of cost of revenues was RMB269.1 million ($41.6 million), representing 7.9% of total revenues, as compared to 9.7% in the corresponding period in 2010 and 8.2% in the first quarter of 2011.
Bandwidth costs as a component of cost of revenues were RMB146.7 million ($22.7 million), representing 4.3% of total revenues, compared to 3.5% in the corresponding period in 2010. Depreciation costs as a component of cost of revenues were RMB143.2 million ($22.2 million), representing 4.2% of total revenues, compared to 4.4% in the corresponding period in 2010.
Selling, general and administrative expenses were RMB377.5 million ($58.4 million), representing an increase of 42.5% from the corresponding period in 2010, primarily due to increased personnel costs and marketing expenses.
Research and development expenses were RMB298.7 million ($46.2 million), an 87.5% increase from the corresponding period in 2010. The increase was primarily due to increased R&D headcount.
Share-based compensation expenses, which were allocated to related operating costs and expense line items, were RMB34.7 million ($5.4 million) in the second quarter of 2011, compared to RMB21.6 million in the corresponding period in 2010 and RMB31.3 million in the previous quarter.
Operating profit was RMB1.858 billion ($287.5 million), representing a 91.2% increase from the corresponding period in 2010. Operating profit excluding share-based compensation expenses (non-GAAP) was RMB1.893 billion ($292.9 million), a 90.6% increase from the corresponding period in 2010.
Income tax expense was RMB285.5 million ($44.2 million), compared to an income tax expense of RMB140.5 million in the corresponding period in 2010. The effective tax rate for the second quarter of 2011 was 14.9%, compared to 14.4% for the corresponding period in 2010 and 14.5% in the previous quarter.
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