Chinese search engine Baidu shares rise on strong 1Q revenue outlook, 4Q results

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Baidu shares up on 1Q revenue outlook, 4Q results

PHILADELPHIA — Shares of Baidu Inc. jumped Wednesday after the operator of China’s most popular search engine reported fourth-quarter results and forecast first-quarter revenue above analyst expectations.

Baidu, whose rival Google Inc. is clashing with the Chinese government over Internet censorship and hacking issues, said late Tuesday that revenue in the quarter should come in at $176 million to $181 million. Analysts forecast revenue of $170.2 million, according to a Thomson Reuters analyst survey.

Shares of Baidu were up $40.78, or 9.4 percent, at $475.79 by midday. They earlier traded at $476.37, eclipsing a previous 52-week high of $470.25 set Jan. 15.

Baidu also said that in the fourth quarter, its earnings rose 48 percent to $62.7 million, or $1.80 per share, while revenue rose 40 percent to $184.7 million. The company’s adjusted income of $1.88 per share beat analysts’ prediction of $1.68 per share.

Pacific Crest analyst Steve Weinstein said Baidu is well-positioned to benefit from growth in Internet searches and China’s economic development. He raised his 2010 earnings and revenue estimates.

Weinstein added that Baidu should continue to do well, especially if Google leaves the Chinese market.

Last month, Google said it might close down its China-based search site Google.cn because of Chinese censorship. It also complained about alleged China-based hacking of its e-mail service. Chinese officials have denied that the government was involved.

Google has been picking up market share in China from smaller rivals, but hasn’t been able to catch up to Baidu.

Baidu had 58.4 percent of China’s search market in the final quarter of 2009, while Google had 35.6 percent, according to Analysys International, a Beijing research firm.