● Baidu Planet ●
*Charts and commentary have been updated for Baidu Q4 December 2010 financial results*
* Unless otherwise noted, currency amounts are in Chinese Renminbi (RMB) *
Baidu Reports Stellar Q4 2010 Earnings
Summary Q4 2010 Baidu reported stellar financial results with record total revenues and net income for Q4 2010. This exceeded the records set in the prior quarter, Q3 2010.
Income Statement Q4 2010 Baidu financial performance was stellar with total revenues RMB 2.45B, net income RMB 1.27B, earnings per share RMB 3.32 ADS. From the prior quarter Q3 2010, QoQ, total revenues were up +8.65%, net income up +10.89%, and earnings per share up +10.84%. From the prior year Q4 2009, YoY, these were up +171.26%, +171.26%, and +169.92%, respectively. Gross and net margins just below the record prior quarter Q3 2010 and well above the prior year Q4 2009. Operating margin was above the prior quarter Q3 2010. All of this data is summarized in the charts below.
Balance Sheet Q4 2010 Total assets increased +19.27% QoQ and +79.45% YoY to a record RMB 11.05B. The capital to assets ratio (total stockholders' equity divided by total assets) is a very solid 76.08%. Baidu is incredibly liquid with a current ratio (current assets divided by total assets) of 79.49%. Baidu has over RMB 8B+ in cash, cash equivalents, and marketable securities.
Baidu Financial Performance by the Quarters (Charts)
Baidu Earnings Per Share (Chart) Below is a chart of quarterly earnings per share. Earnings per share have increased 5 of the last 6 quarters and 4 consecutive quarters. The chart covers the past 7 quarters, from June 2009 through the latest quarter reported, December 2010. Recent chart data is:
Quarter, Earnings per Diluted Share
Dec09: RMB 1.23
Mar10: RMB 1.38
Jun10: RMB 2.40
Sep10: RMB 3.00
Dec10: RMB 3.32
Baidu Total Revenues, Operating Income, and Net Income (Chart) Below is a chart of quarterly total revenues, operating income, and net income. Total revenues have increased for 7 consecutive quarters, after the dip in Q1 2009. Operating income has increased for 4 consecutive quarters, after the dip in Q4 2009. Net income has also increased for 4 quarters, after the dip in Q4 2009. The chart covers the past 9 quarters, from December 2008 through the latest quarter reported, December 2010. Recent chart data is:
Quarter, Total Revenues, Operating Income, Net Income
Dec09: RMB 1.26B, 462M, 428M
Mar10: RMB 1.29B, 531M, 481M
Jun10: RMB 1.91B, 972M, 837M
Sep10: RMB 2.26B, 1.18B, 1.05B
Dec10: RMB 2.45B, 1.27B, 1.16B
Baidu Gross Margin, Operating Margin, and Net Margin (Chart) Below is a chart of quarterly gross margin, operating margin, and net margin. Overall, these are incredible margins. Gross margin has been increasing, from a low of 60.25% in Q1 2009 to a high of 74.57% in Q3 2010. Operating margin has been increasing from a low of 24.49% in Q1 2009 to a high of 52.37% in Q3 2010. Net margin has been increasing and the current Q4 2010 net margin of 47.35% is the highest of the quarters reviewed. The chart covers the past 9 quarters, from December 2008 through the latest quarter reported, December 2010. Recent chart data is:
Quarter, Gross Margin, Operating Margin, Net Margin
Dec09: RMB 64.11%, 36.65%, 33.93%
Mar10: RMB 67.05%, 41.02%, 37.14%
Jun10: RMB 72.92%, 50.76%, 43.74%
Sep10: RMB 74.57%, 52.37%, 46.40%
Dec10: RMB 74.26%, 52.01%, 47.35%
Baidu Return on Assets (Chart) Below is a chart of annual return on average assets per quarter. The total net income for the most recent 4 quarters is divided into average assets for the most recent 4 quarters to obtain a rolling annualized ROA, an annualized return on average assets for the 12 months (4 quarters) ended. The ROA is amazingly high and has been increasing for 4 consecutive quarters on the chart. The chart covers the past 5 quarters, from December 2009 through the latest quarter reported, December 2010. Recent chart data is:
Quarter, Return on Assets
Baidu Growth Rates (Chart) Below is a chart of the quarterly (QoQ, Q/Q, quarterly change) growth rates for revenues and earnings per share. Baidu has been high growth company and stock. Total revenues and earnings per share have increased for 4 consecutive quarters, after a dip in Q4 2009. The chart covers the past 8 quarters, from March 2009 through the latest quarter reported, December 2010. Recent chart data is;
Quarter, Total Revenues Change %, Earnings Per Share Change %
Dec09: -1.39%, -13.22%
Mar10: +2.62%, +12.22%
Jun10: +47.95%, +74.15%
Sep10: +17.84%, +24.98%
Dec10: +8.65%, +10.84%
Traffic Acquisition Costs (Chart) Below is a chart of traffic acquisition costs (TAC) as a percentage (%) of total revenues. This is a direct cost and the net is the gross profit before other expenses are allocated to cost of revenues. TAC has been trending downwards which means increased gross profit for Baidu. The chart covers the past 5 quarters, from December 2009 through the latest quarter reported, December 2010. Recent chart data is:
Quarter, TAC as a % of Total Revenues
Baidu Announces Fourth Quarter and Fiscal Year 2010 Financial Results
BEIJING - January 31, 2011 –
Baidu, Inc. (NASDAQ: BIDU), the leading Chinese language Internet search provider, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2010(1).
Fourth Quarter and Fiscal Year 2010 Highlights
* Total revenues in the fourth quarter of 2010 were RMB2.451 billion ($371.3 million), a 94.4% increase from the corresponding period in 2009.
* Total revenues in fiscal year 2010 were RMB7.915 billion ($1.199 billion), a 78.0% increase from 2009.
* Operating profit in the fourth quarter of 2010 was RMB1.275 billion ($193.2million), a 175.8% increase from the corresponding period in 2009.
* Operating profit in fiscal year 2010 was RMB3.959 billion ($599.8 million), a 146.7% increase from 2009.
* Net income in the fourth quarter of 2010 was RMB1.161 billion ($175.9 million), a 171.3% increase from the corresponding period in 2009. Diluted earnings per ADS(2) for the fourth quarter of 2010 was RMB3.32($0.50); diluted ADS excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2010 was RMB3.40($0.52).
* Net income in fiscal year 2010 was RMB3.525 billion ($534.1 million), a 137.4% increase from 2009. Diluted earnings per ADS for fiscal year 2010 was RMB10.10($1.53); diluted ADS excluding share-based compensation expenses (non-GAAP) for fiscal year 2010 was RMB10.36($1.57). Costs and expenses related to Baidu's Japan operations for fiscal year 2010 were RMB182.4 million ($27.6 million), which reduced diluted earnings per ADS by RMB0.49($0.07).
- This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB 6.6000 to US$1.00, the effective noon buying rate as of December 30, 2010 in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York.
- Effective on May 12, 2010, Baidu adjusted the ratio of its American depositary shares ("ADSs") representing Class A ordinary shares from one (1) ADS for one (1) Class A ordinary share to ten (10) ADSs for one (1) Class A ordinary share. All earnings per ADS figures in this announcement give effect to the forgoing ADS to share ratio change.
"This has been another quarter of outstanding performance for Baidu, with market momentum and our continued improvement in monetization fuelling top line growth," said Robin Li, Baidu's chairman and chief executive officer.
"Baidu continues to build upon our clear leadership in China's search market," Mr. Li added. "Looking forward we will further integrate search with online activities such as e-commerce and social networking and I am confident that Baidu will remain at the center of China's Internet ecosystem."
"I am pleased to report another quarter of stellar top and bottom line growth," commented Jennifer Li, Baidu's chief financial officer. "I'm also excited to note that in 2010 we enjoyed accelerating top line growth and record profitability despite substantial investment. As we remain focused on developing the market and driving top-line growth, we will continue to aggressively invest in R&D, sales, marketing and network infrastructure."
Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu's ADSs, each of which represents one Class A ordinary share, currently trade on the NASDAQ Global Select Market under the symbol "BIDU".
The Baidu Story
Many people have asked about the meaning of our name. "Baidu" was inspired by a poem written more than 800 years ago during the Song Dynasty. The poem compares the search for a retreating beauty amid chaotic glamour with the search for one's dream while confronted by life's many obstacles. "…hundreds and thousands of times, for her I searched in chaos, suddenly, I turned by chance, to where the lights were waning, and there she stood." Baidu, whose literal meaning is hundreds of times, represents persistent search for the ideal.
Baidu chose a poetic Chinese name because it wants the world to remember its heritage. As a native speaker of the Chinese language and a talented engineer, Baidu focuses on what it knows best - Chinese language search. Applying avant-garde technology to the world's most ancient and complex language is as challenging as it is exciting. At least people here at Baidu think so. As having diligently disclosed in the Prospectus of our recent Initial Public Offering, we believe there are at least 38 ways of saying "I" in Chinese. It is important that we master all the ways of addressing oneself in Chinese because our users depend on us to address every one of their daily queries. And trust us, pin pointing queries in the Chinese language is an art rather than a science.
Our mission is to provide the best way for people to find information. To do this we listen carefully to our users' needs and wants. Have we collected all the Chinese web pages they want to see? Are the pages current and up to date? Are the search results closely related to their queries? Did we return those search results instantly? To improve user experience, we constantly make improvements to our products and services. For example, we introduced "phonetic" or "pin-yin" search which allows our users to type in Chinese keywords using English alphabets. This feature is designed to skip the switching from English inputting to Chinese inputting and for when the user is not sure of the written form of a keyword. Our users definitely notice the many little things that we do differently to ensure a simple and reliable search experience every time.
In addition to serving individual users, we also serve as a media platform for online marketing customers. We not only provide our customers easy access to one of the largest online audiences in China but also targeted groups with defined interests as indicated by queries. Unlike traditional online advertising services which charge by flat fee, our marketing products and services are performance based. Our Pay for Performance model has taken the market by storm because it is cost effective and measurable.
We know that a lot of interesting things are going on in the Internet space, but we don't want to lose focus. China's Internet search industry is only a newly discovered territory. We see vast untapped grounds in our home base and we believe there are still plenty of prizes to be claimed by the best players.
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