Chinese search engine company Baidu Inc. announced its unaudited financial results for the second quarter ended June 30, 2011, and stated that as its tax rate increased, so did its profit.
Total revenues in the second quarter of 2011 were USD528.4 million, a 78.4% increase from the corresponding period in 2010. Net income was USD252.6 million, a 95% increase from the corresponding period in 2010.
Jennifer Li, Baidu's chief financial officer, commented: "Our top and bottom line results grew strongly again this quarter, with healthy increases in overall traffic and paid click growth. We will continue to accelerate our investments in strategic areas, R&D, network infrastructure and bringing new talents on board to drive long term growth."
Traffic acquisition cost as a component of cost of revenues was USD41.6 million, representing 7.9% of total revenues, as compared to 9.7% in the corresponding period in 2010 and 8.2% in the first quarter of 2011. Operating profit was USD287.5 million, representing a 91.2% increase from the corresponding period in 2010.
Income tax expense for Baidu was USD44.2 million. The effective tax rate for the second quarter of 2011 was 14.9%, compared to 14.4% for the corresponding period in 2010 and 14.5% in the previous quarter.
As of June 30, 2011, Baidu had cash, cash equivalents and short-term investments of USD1.59 billion.
Baidu says it currently expects to generate total revenues in an amount ranging from USD611.1 million to USD626.6 million for the third quarter of 2011, representing a 75.1% to 79.5% year-over-year increase.