Baidu Announces First Quarter 2013 Results

25 April 2013 14 h 21 min Comments Off

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BEIJING, April 25, 2013  — Baidu, Inc. (NASDAQ: BIDU), the leading Chinese language Internet search provider, today announced its unaudited financial results for the first quarter ended March 31, 2013[1].

First Quarter 2013 Highlights

Total revenues in the first quarter of 2013 were RMB5.969 billion ($961.0 million), a 40.0% increase from the corresponding period in 2012.
Operating profit in the first quarter of 2013 was RMB2.210 billion ($355.9 million), a 5.7% increase from the corresponding period in 2012.
Net income attributable to Baidu in the first quarter of 2013 was RMB2.043 billion ($328.9 million), an 8.5% increase from the corresponding period in 2012. Diluted earnings attributable to Baidu per ADS for the first quarter of 2013 were RMB5.88 ($0.95); diluted earnings attributable to Baidu per ADS excluding share-based compensation expenses (non-GAAP) for the first quarter of 2013 were RMB6.20 ($1.00).
“We saw healthy financial results in the first quarter of 2013 as we continued to invest in establishing China’s leading mobile ecosystem.” said Robin Li, chairman and chief executive officer of Baidu. “Our mobile offering is making exciting progress, with our flagship mobile search product having now surpassed 100 million daily active users, an over 25% increase from the end of the fourth quarter.”

Mr. Li continued, “Continually developing the most advanced search technology remains central to Baidu’s overall strategy, and we’re very excited by the possibilities opened up by innovation in image and voice recognition. Our focus will remain on tightly integrating our leading search core with valuable vertical products in areas such as travel, e-commerce and location based services to bring users the information they want as quickly as possible on both desktop and mobile devices.”

Jennifer Li, Baidu’s chief financial officer, commented, “We remain committed to investing aggressively, particularly in marketing and R&D. By deploying resources in the most strategically important areas of our business, we’re confident we can build exceptional long-term value for shareholders. For the quarter, we also recognized a whole quarter consolidation of iQiyi.”

First Quarter 2013 Results

Baidu reported total revenues of RMB5.969 billion ($961.0 million) for the first quarter of 2013, representing a 40.0% increase from the corresponding period in 2012.

Online marketing revenues for the first quarter of 2013 were RMB5.953 billion ($958.5 million), representing a 39.7% increase from the corresponding period in 2012. Baidu had about 410,000 active online marketing customers in the first quarter of 2013, representing a 27.7% increase from the corresponding period in 2012 and a 1.0% increase from the fourth quarter of 2012.

Revenue per online marketing customer for the first quarter was approximately RMB14,500 ($2,335), a 9.0% increase from the corresponding period in 2012 and a 6.5% decrease compared to the fourth quarter of 2012.

Traffic acquisition cost (TAC) as a component of cost of revenues was RMB609.6 million ($98.2 million), representing 10.2% of total revenues, as compared to 7.8% in the corresponding period in 2012 and 9.6% in the fourth quarter of 2012. The increase mainly reflects increased contextual ads contributions and hao123 promotions through our network.

Bandwidth costs as a component of cost of revenues were RMB404.9 million ($65.2million), representing 6.8% of total revenues, compared to 5.2% in the corresponding period in 2012. Depreciation costs as a component of cost of revenues were RMB333.1 million ($53.6 million), representing 5.6% of total revenues, compared to 5.4% in the corresponding period in 2012. These increases were mainly due to an increase in network infrastructure capacity.

Content costs as a component of cost of revenues were RMB95.8 million ($15.4 million), representing 1.6% of total revenues, compared to 0.7% in the corresponding period in 2012. This increase mainly reflects the full quarter impact of iQiyi’s consolidation. 

Selling, general and administrative expenses were RMB848.1 million ($136.6 million), representing an increase of 77.2% from the corresponding period in 2012, primarily due to an increase in promotional expenses.

Research and development expenses were RMB810.7 million ($130.5 million), an 82.9% increase from the corresponding period in 2012. The increase was primarily due to an increase in the number of research and development personnel.

Share-based compensation expenses, which were allocated to related operating costs and expense line items, were RMB110.9 million ($17.9 million) in the first quarter of 2013, compared to RMB35.2 million in the corresponding period in 2012 and RMB66.6 million in the fourth quarter of 2012. The increase from the corresponding period was a result of increased share grants to employees.

Operating profit was RMB2.210 billion ($355.9 million), representing a 5.7% increase from the corresponding period in 2012. Operating profit excluding share-based compensation expenses (non-GAAP) was RMB2.321 billion ($373.8 million), a 9.2% increase from the corresponding period in 2012.

Income tax expense was RMB388.9 million ($62.6 million), compared to an income tax expense of RMB331.2 million in the corresponding period in 2012. The effective tax rate for the first quarter of 2013 was 16.2% as compared to 15.1% for the corresponding period in 2012 and 16.2% in the fourth quarter of 2012.

Net income attributable to Baidu was RMB2.043 billion ($328.9 million), representing an 8.5% increase from the corresponding period in 2012. Basic and diluted earnings per ADSfor the first quarter of 2013 amounted to RMB5.89 ($0.95) and RMB5.88 ($0.95), respectively.

Net income attributable to Baidu excluding share-based compensation expenses (non-GAAP) was RMB2.154 billion ($346.8 million), a 12.3% increase from the corresponding period in 2012. Basic and diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) for the first quarter of 2013 amounted to RMB6.20 ($1.00) andRMB6.20 ($1.00), respectively.

As of March 31, 2013, the Company had cash, cash equivalents and short-term investments of RMB33.817 billion ($5.445 billion). Net operating cash inflow for the first quarter of 2013 was RMB2.186 billion ($351.9 million). Capital expenditures for the first quarter of 2013 were RMB 468.2 million ($75.4 million).

Adjusted EBITDA (non-GAAP), defined in this announcement as earnings before interest, taxes, depreciation, amortization, other non-operating income and share-based compensation expenses, was RMB2.781 billion ($447.8million) for the first quarter of 2013, representing a 13.9% increase from the corresponding period in 2012.

Outlook for Second Quarter 2013

Baidu currently expects to generate total revenues in an amount ranging from RMB7.370 billion ($1.187 billion) to RMB7.550 billion ($1.216 billion) for the second quarter of 2013, representing a 35.1% to 38.4% year-over-year increase. This forecast reflects Baidu’s current and preliminary view, which is subject to change.

 full press release

About Baidu

Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving individual Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu’s ADSs trade on the NASDAQ Global Select Market under the symbol “BIDU”. Currently, ten ADSs represent one Class A ordinary share.
 

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