Chinese search giant Baidu failed to live up to analyst expectations in the first quarter of 2013 with its $961 million in revenue and adjusted earnings per share of $1.00. Analysts had expected revenue of $969 million and EPS of $1.03.
Commenting on the company’s performance during the quarter, CEO Robin Li said:
We saw healthy financial results in the first quarter of 2013 as we continued to invest in establishing China’s leading mobile ecosystem. 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.
Baidu’s revenue increased 40 percent year-over-year, but operating profit was up just 5.7 percent during the period. Net income increased 8.5 percent from the first quarter of 2012.
Baidu hit 80 million daily active mobile search users back in February, so it picked up an additional 20 million users during the remainder of the March quarter. While Baidu has been successful in attracting users to its mobile offerings, monetization has lagged behind.
In the year ago quarter, Baidu had revenues of $677.1 million (RMB 4.264 billion) with earnings per share of $0.87.
In the fourth quarter of 2012, Baidu posted revenue of more than $1 billion and $1.31 EPS. The firm’s revenue outlook for the March quarter was a range of $945.4 million to $975.9 million.
Shares of Baidu were up 4.84 percent on Thursday to $92.36. The stock was down roughly 8 percent in after-hours trading..
Investors have lost some confidence in Baidu after rival Qihoo 360 began putting pressure on the company’s search monopoly. Qihoo launched a search engine last summer and has taken as much as 14 percent of the domestic market, according to some estimates.
Baidu has a couple possible “Hail Mary” plays in the works. Earlier this month, the company confirmed that it is testing a smart eyewear prototype similar to Google Glass called Baidu Eye, though the company couldn’t promise that the device would make it to market.
For the second quarter of 2013, Baidu expects revenues in the range of $1.187 billion (RMB7.370 billion) to $1.216 billion (RMB 7.550 billion), representing growth of 35.1 percent to 38.4 percent year-over-year.
Headline image via LIU JIN / Getty Images