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Beijing, China-based Baidu's third quarter net income was RMB 492.9 million or US$72.2 million, up 41.6% from RMB 347.86 million or US$51.2 million million in the same quarter last year. Earnings on a per share basis were RMB 14.14 or US$2.07, compared to RMB 10.00 or US$1.47 in the year ago quarter.
Excluding share-based compensation expenses, non-GAAP net income for the quarter was RMB 514.1 million or US$75.3 million, a 40.9% increase from RMB 364.9 million or US$53.7 million in the corresponding period in 2008. Non-GAAP earnings on a per share basis were RMB 14.75 or US$2.16 for the quarter, compared to RMB 10.49 or US$1.54 last year.
On average, nine analysts polled by Thomson Reuters expected the company to earn US$1.81 per share for the quarter. Analysts estimates typically exclude special items.
Earnings for the quarter under review were impacted by costs and expenses related to Baidu's Japan operations amounting to RMB 40.6 million or US$6.0 million, which reduced earnings by RMB 1.17 or US$0.17 per share.
Total revenues for the quarter increased 39.1% to RMB 1.28 billion or US$187.3 million from RMB 919.13 million or US$135.4 million in the prior-year quarter. Ten analysts had a revenue consensus of US$187.79 million for the third quarter.
Baidu had more than 216,000 active online marketing customers in the third quarter of 2009, representing a 11.3% increase from the corresponding period in 2008 and a 16.0% increase from the previous quarter.
Online marketing revenues for the quarter were RMB 1.28 billion or US$187.2 million, an increase of 39.2% from the corresponding period in 2008.
Traffic acquisition cost as a component of cost of revenues was RMB 196.2 million or US$28.7 million, representing 15.3% of total revenues, as compared to 11.8% in the prior year quarter, reflecting continued fast growth of Baidu's Union business.
Bandwidth costs as a component of cost of revenues were RMB 51.2 million or US$7.5 million, representing 4.0% of total revenues, compared to 5.2% in the prior-year period. Depreciation costs were RMB 63.6 million or US$9.3 million, representing 5.0% of total revenues, compared to 6.2% in the corresponding period in 2008. The decreases in bandwidth and depreciation costs as percentages of total revenues reflect efficiency improvements as well as increased scalability of investment in capital expenditure.
Selling, general and administrative expenses were RMB 197.7 million or US$29.0 million, up 21.1% from the corresponding period in 2008, primarily due to increased marketing activities.
Share-based compensation expenses, which were allocated to related operating costs and expense line items, were RMB 21.3 million or US$3.1 million in the third quarter of 2009, compared to RMB 17.0 million in the corresponding period in 2008.
Operating profit was RMB 521.4 million or US$76.4 million, an increase of 41.6% from the similar quarter of 2008. Operating profit excluding share-based compensation expenses was RMB 542.7 million or US$79.5 million, a 40.8% increase from the corresponding period in 2008.
Among related companies, Beijing, China-based Sohu.com Inc.'s (SOHU | Quote | Chart | News | PowerRating) net income for the third quarter increased to US$47.08 million from US$40.24 million in the previous year. Excluding share-based compensation expense, quarterly net income attributable to the company was US$40.92 million or US$0.96 per share, down from US$42.82 million or US$1.08 per share reported in the previous year.
Search engine giant Google Inc.'s (GOOG | Quote | Chart | News | PowerRating) third quarter net income increased to US$1.64 billion or US$5.13 per share over last year, driven predominantly by higher advertising revenues. Third quarter gross revenues increased 7% to US$5.94 billion from the same quarter of last year. Excluding Traffic Acquisition Costs, revenues for the quarter rose 8% to US$4.38 billion from a year earlier.
Looking forward to the fourth quarter, Baidu expects moderate year-over-year growth due to the temporary negative impact anticipated when the Online Marketing Classic Edition is discontinued. Baidu currently expects to generate total revenues in an amount ranging from RMB 1.19 billion or US$174 million to RMB 1.23 billion or US$180 million for the fourth quarter of 2009, representing 32% to 36% year-over-year growth.
Analysts currently expect revenues of US$202.90 million for the fourth quarter.
BIDU closed Monday's regular trading at US$432.97, down US$2.34 or 0.54%, on a volume of about 3.55 million shares. In after hours, the shares dropped US$56.98 or 13.16%, at US$375.99.
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