(Yicai Global) Feb. 28 -- Baidu, China's leading search engine operator, expects revenue to fall between 5 percent and 13 percent in the current quarter from a year earlier as the ongoing coronavirus epidemic knocks its advertising income.
Revenue could come in at between CNY21 billion and CNY22.9 billion (USD3 billion and USD3.27 billion) in the three months through March, the Beijing-based company said in its fourth-quarter earnings report published today.
Baidu is one of the latest in a string of Chinese companies to warn on weaker earnings as the novel coronavirus epidemic disrupts activity in the world's second-largest economy. Two weeks ago, Hangzhou-based Alibaba Group Holding, Asia's most valuable tech company, said the outbreak is having a detrimental impact on business. Spending on digital advertising, a key source of revenue for Baidu, will likely drop due to the disruption.
In the fourth quarter of last year, Baidu's net income climbed almost two-fold from a year earlier to CNY9.2 billion thanks to strong growth at its various businesses, the firm said. Revenue rose 6 percent to almost CNY29 billion. Baidu did not provide a business-by-business breakdown in its earnings report, which was calculated on non-generally accepted accounting principles.
Revenue from core segments reached CNY21.7 billion, a 6 percent gain, while that from its iQiyi online video service hit CNY7.5 billion, up 7 percent.
Baidu's shares [NASDAQ:BIDU] closed 2.9 percent down yesterday at USD119.91.
Costs among revenues were CNY15.5 billion in a 1 percent yearly drop that came mainly from lower content and traffic acquisition costs, offset by increases in its hardware and cloud expenses for goods sold, impairment and amortization of intangible assets, and depreciation.
Sales, general and administrative expenditures were CNY4 billion for an annual one-third per-year decrease, mostly stemming from falling investment in channel spending and promotional marketing, as well as lower outlays for personnel.
For the full year, net income was CNY18.2 billion, up 24 percent, while total revenues reached CNY107.4 billion, a 5 percent increase.
Editor: Ben Armour