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Baidu narrowly missed expectations for revenues in the fourth quarter of last year, but the company said that the worst of the advertising scandal it suffered had already passed.
Total revenues in the fourth quarter fell 2.6 per cent from the previous year to Rmb2.62bn ($381.6m), just below a median forecast of Rmb2.67bn from analysts surveyed by Bloomberg. Operating profits fell 38.2 per cent to Rmb2.19bn, coming in slightly below expectations of Rmb2.31bn.
As China’s biggest search engine, Baidu’s revenues were hurt last year by a highly-publicised scandal in which a young man died after buying experimental cancer treatment advertised on Baidu.com.
Regulators ordered the company to reduce the advertising it carried alongside its search results, as well as vet its advertisers more closely. As a result the company lost 18.6 per cent of its advertising clients in the fourth quarter compared to a year before.
However, shares rose slightly during after-hours trading from the news that Baidu managed to raise earnings per share to Rmb6.49, beating analysts’ median forecast of Rmb6.26.