Baidu Q2 profit up 70 percent on ad sales

Robust ad sales have helped Chinese Internet-search giant Baidu post a 70 percent rise in its net profit, which hit 2.77 billion yuan (US$436 million) for the the three months ended June. This was on the back of a 60 percent rise in revenue for the second quarter of 5.46 billion yuan (US$858.8 million) from a year ago.

"We are pleased to announce strong results for the second quarter despite macro headwinds and challenging comparisons with the same period last year," said Robin Li, chairman and CEO of Baid, in a statement Monday.

The Nasdaq-listed company revealed that margins also improved with revenue per online marketing customer increasing 34.8 percent to 15,500 yuan (US$2,440).

This helped offset rising overhead costs, or selling, general and administrative expenses, which rose 55.6 percent to 587.6 million yuan (US$92.5 million) for the same period. Research and development costs for the quarter also grew by 82.7 percent to 545.5 million yuan (US$85.9 million) as the company continued to hire more staff.
Jennifer Li, Baidu's chief financial officer, commented in the statement: "Moving forward, this robust investment strategy will be key to achieving long-term, sustainable growth and strengthening Baidu's position at the heart of China's Internet ecosystem."
For the third quarter, Baidu cexpects to generate revenue ranging from 6.25 billion yuan (US$983 million) to 6.41 billion (US$1.01 billion), representing a 49.6 percent to 53.5 percent year-over-year increase.
In June, Baidu signed an ad revenue sharing deal with Apple where Cupertino would get a cut, in return for adding its seach engine on iPhones in China.