Chinese Internet search engine Baidu.com (BIDU) has announced its unaudited financial results for the first quarter ended March 31, 2006.
Total revenues increased by 18.0% sequentially or 196.8% year-over-year to CNY135.6 million. Net income increased by 43.5% sequentially or 1309% year-over-year to CNY35.2 million. Basic and diluted earnings per share were CNY1.07 and CNY1.02, respectively.
"Baidu posted another strong quarter as we continued to extend our leadership in the Chinese search market," said Robin Li, Baidu's Chairman and CEO. "Our customer base expanded as we further strengthened our distribution capability and as companies in China increasingly realized the benefits of Baidu's pay-for-performance online marketing platform."
Net income excluding share-based compensation expenses and cumulative effect of change in accounting principle (non-GAAP) was CNY43.5 million.
Basic and diluted EPS excluding share-based compensation expenses and cumulative effect of change in accounting principle (non-GAAP) were CNY1.31 and CNY1.26, respectively.
"Less than expected seasonality impact combined with continued improvement in our monetization algorithm contributed to the strong revenue growth in the first quarter," said Shawn Wang, Baidu's CFO. "And, the strong top line enabled us to deliver robust earnings, which reflect the scalability inherent in our business model."
"During the first quarter, we continued to invest in our technology and product innovation, as well as sales and distribution infrastructure," Wang continued. "We are very encouraged by the demonstrated strength of our business and the potential of China's search market. We remain committed to making investments for the long-term."
Selling, general and administrative expenses for the first quarter were CNY50.3 million, representing an increase of 2.0% from the previous quarter and an increase of 145.2% from the first quarter of 2005.
Research and development expenses were CNY15.5 million, representing an 8.7% sequential increase and a 136.7% increase from the corresponding period in 2005, primarily due to expansion of headcount.
As of March 31, 2006 Baidu.com had cash and cash equivalents of CNY975.9 million. Net operating cash flow and capital expenditures for the first quarter of 2006 were CNY 94.5 million and CNY12.4 million, respectively.
Baidu currently expects to generate total revenues in an amount ranging from CNY186 million to CNY193 million in the second quarter of 2006, representing a 167% to 177% increase from the corresponding period in 2005. This forecast reflects Baidu's current and preliminary view, which is subject to change.