Baidu Inc more than doubled its profit in the first quarter and forecast stronger-than-expected revenue for the second quarter, betting on strong online advertising demand among China's businesses.
Shares of Baidu, which are up more than 50 percent since the start of the year, were down slightly at $150.65 in after-hours trade after closing Wednesday's regular session at$151.11.
Baidu, the No. 1 Internet search engine in China, said it expects second-quarter revenue of $493.3 million to $503.9 million, above analysts' forecasts of $484.2 million, according to Thomson Reuters I/B/E/S.
For the first quarter, Baidu reported net income of $163.5 million, or 47 cents per American Depository Share. This compared with $70.4 million, or $2.10 per share, a year ago, before a 10-for-1 stock split.
The average analyst expectation called for earnings per ADS of 45 cents.
Baidu Chief Financial Officer Jennifer Li said in a statement that the company would continue to support long-term growth by focusing significant investment on research and development, marketing and network infrastructure, among other things, in the coming quarters.
China, with more than 450 million users, is the world's largest Internet market. Yet with Internet penetration hovering around 30 percent and lack of sophisticated users outside the big cities, the potential for growth is huge.
Baidu, which increased its focus on e-commerce and online video, surged in dominance in China's search market after Google Inc curtailed its operations following a high-profile fallout with Beijing over censorship last year.
But analysts see an increasingly competitive landscape in China's search market in the next few years, as competitors such as Sohu.com, Alibaba Group and Tencent Holdings wrestle for market share.
Baidu's total revenue for the first quarter was $372 million, above its own forecast of $360.6 million to $371.2 million and up roughly 88 percent from a year ago. Analysts estimates called for revenue of $367.3 million.
(Reporting by Alexei Oreskovic; Editing by Anshuman Daga, Carol Bishopric and Steve Orlofsky)