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China's Baidu.com Says Earnings Nearly Tripled

October 27, 2005|From Bloomberg News

Baidu.com Inc., China's most-used Internet search engine, said third-quarter net income almost tripled after it sold more advertising alongside Web search results. But its shares dropped 14% on disappointment that profit didn't rise even more.

Net income rose to 8.5 million yuan ($1.05 million), or 0.26 yuan a share, from 2.94 million yuan, or 0.10 yuan, a year earlier, Beijing-based Baidu.com said Wednesday. Sales more than doubled to 88.9 million yuan.

Baidu.com's stock has risen threefold since the company went public in August as investors bet Chinese companies would spend more to advertise on the Web. Baidu.com ramped up spending in the quarter to fight Google Inc. and Yahoo Inc. for China's more than 100 million Internet users. Costs rose 43% from the second quarter, compared with a 28% revenue gain.

"With the stock being so highly valued, the expectation was for a higher upside," said Safa Rashtchy, an analyst at Piper Jaffray & Co. in Menlo Park, Calif.

Baidu.com's American depositary receipts fell $11.56 to $69.49 in extended trading. They earlier rose $1.24 to $81.05.

Sales in the fourth quarter are expected to total 102 million yuan to 106 million yuan, or $12.6 million to $13.1 million, Baidu.com said.

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