Baidu Shares Surge as Profit Beats Analysts’ Estimates

Tuesday, 24 Jul 2012 12:11 PM

 

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Shares of Baidu Inc., owner of China’s largest online search engine, surged the most in two years after second-quarter profit exceeded analysts’ estimates.

Baidu’s American depositary receipts jumped 12 percent to $119.66 at 10:37 a.m. Tuesday in New York, heading for the biggest increase since April 2010.

Second-quarter net income soared 70 percent to 2.77 billion yuan ($436 million), the Beijing-based company said in a statement after U.S. markets closed Monday. That surpassed the average estimate of 2.49 billion yuan of 10 analysts surveyed by Bloomberg. The 5.46 billion yuan sales for the quarter compared with a 5.47 billion yuan forecast of analysts.

Baidu forecast third-quarter sales will grow as much as 54 percent to 6.41 billion yuan. That compares with a 6.39 billion-yuan average of analysts’ estimates compiled by Bloomberg prior to the earnings announcement.

Strong advertising growth in small businesses “helped counter macro headwinds with weak ads operating environment,” Cynthia Meng, a Hong Kong-based analyst at Jefferies Group Inc., wrote in research a note today. “Earnings beat both Street and our estimates.”

Baidu will consider making acquisitions as the company aims to offer new services to users at a faster pace, Chief Executive Officer Robin Li said in a conference call with analysts after the company reported earnings.

© Copyright 2014 Bloomberg News. All rights reserved.

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