Baidu Profit Beats Estimates as Smartphone Users Boost Sales

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Baidu Inc. reported profit that beat analysts’ estimates as the addition of mapping and shopping services helped attract more of the 557 million Chinese accessing the Internet through their devices.

Net income fell 3.4 percent to 2.45 billion yuan ($395 million) in the quarter ended March, the Beijing-based company said in a statement. That compares with the 2.34 billion-yuan average of 13 analysts’ estimates compiled by Bloomberg.

Billionaire founder Robin Li is adding functions to help people find their way through malls and office buildings or find product information on their smartphones. The new services have helped increase mobile revenue to 50 percent of the total for the operator of China’s most-used search engine.

“Baidu successfully dominates the emerging market of mobile search,” David Riedel, President of New York-based Riedel Research Group Inc. wrote in a report after results. “During the shift from personal computer to cell phone, Baidu’s customer number accelerated.”

The mobile push helped boost first-quarter revenue 34 percent to 12.7 billion yuan. That compares with the 12.9 billion-yuan average of 18 analysts’ estimates.

“The fundamentals are very robust,” Jennifer Li, Baidu chief financial officer, said on a conference call Thursday. “We continue to see many areas of monetization and the customer base where we can drive future growth.” She didn’t elaborate on the outlook for the third and fourth quarters.

Baidu shares closed little changed at $219 in New York Wednesday before the results were announced. They have fallen 3.9 percent this year.

The company forecast second-quarter sales of between 16.4 billion yuan and 16.8 billion yuan. That compares with the 16.7 billion-yuan average of 15 analysts’ estimates.

— With assistance by Edmond Lococo

(Updates with analyst comment in fourth paragraph.)
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