3q20 net profit of $2.015 billion From Baidu

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The following is the 3q20 net profit of $2.015 billion From Baidu recommended by recordtrend.com. And this article belongs to the classification: cloud computing, artificial intelligence, Enterprise financial report, Search Engines.

On November 17, 2020, baidu (NASDAQ securities code: BIDU) released the company’s third quarter results as of September 30, 2020 after hours on Tuesday. Baidu’s net profit in the third quarter was $2.015 billion, and the company turned a loss year on year. According to the financial report, Baidu’s total revenue in the third quarter was 28.232 billion yuan (about 4.158 billion U.S. dollars), an increase of 1% from 28.80 billion yuan in the same period of last year; the net profit attributable to Baidu was 13.678 billion yuan (about 2.015 billion U.S. dollars), and the net loss was 6.373 billion yuan compared with the same period last year. Baidu’s performance loss in the third quarter of last year was mainly due to the cash impairment loss of equity investment of RMB 8.9 billion.

Not in accordance with US GAAP, Baidu’s net profit in the third quarter was 6.988 billion yuan (US $1.029 billion), or 20.35 yuan (about US $3.00) of diluted earnings per American Depository Receipt (ADR), and 14.73 yuan per share in the same period last year.

Baidu’s third quarter results exceeded market expectations. According to a Thomson Reuters survey, market analysts had expected, on average, that Baidu’s diluted earnings per ADR share in the third quarter would be $2.06 billion and revenue would be $4.15 billion, according to Thomson Reuters.

The following is Baidu’s third quarter performance details:

– total revenue in the third quarter was 28.232 billion yuan (US $4.158 billion), up 1% from 28.80 billion yuan in the same period last year. Baidu core (a combination of search and trading services) generated 21.4 billion yuan (US $3.15 billion) in revenue, up 2% year-on-year.

– operating profit in the third quarter was 6.156 billion yuan (US $907 million), up 161% from 3.579 billion yuan in the same period last year.

– operating profit in the third quarter was 7.636 billion yuan (US $1.125 billion), up 107% from the same period last year.

– net profit attributable to Baidu in the third quarter was 13.678 billion yuan (US $2.015 billion), compared with a net loss of 6.373 billion yuan in the same period last year. In the third quarter, Baidu’s diluted earnings per ADR share were 39.79 yuan (US $5.86), compared with 18.37 yuan per share in the same period last year.

In the third quarter, net profit attributable to Baidu was 6.988 billion yuan (US $1.029 billion), up 59% year-on-year. In the third quarter, the diluted earnings per American Depository Receipt attributable to Baidu was 20.35 yuan (about US $3.00), up 61% year-on-year.

“With the reversal of many vertical advertising business, our revenue grew positively in the third quarter, which gives Baidu a favorable position and can further benefit from China’s economic recovery,” said Baidu co-founder and CEO Robin Li. “Baidu’s dynamic mobile ecosystem in the past few years has laid a solid foundation for us to develop our non advertising business. Our new AI business saw healthy growth in the third quarter, especially in the cloud, where we differentiate from AI solutions. “

“Our team performed well in the third quarter, achieving revenue growth, strong profitability and cash flow, which proves the sustainability of Baidu’s business,” said Yu Zhengjun, Baidu’s chief financial officer. Our focus on differentiating Baidu from open platforms, in app search and new AI businesses has enabled Baidu’s core adjusted EBITDA margin to reach 46% in the third quarter. We have also implemented our capital allocation strategy by reducing equity investments and continuing to implement share buyback programs. “

Third quarter financial analysis:

Total revenue in the third quarter was 28.232 billion yuan (US $4.158 billion), up 1% from 28.80 billion yuan in the same period last year.

Baidu’s core business revenue increased by 31% to 21.45 billion yuan. The online marketing revenue from Baidu core was RMB 18.4 billion (about US $2.72 billion), which was basically the same as that of the same period last year; the non online marketing revenue from Baidu core was RMB 2.9 billion (about USD 434 million), with a year-on-year increase of 14%, mainly driven by the growth of cloud services.

Revenue cost was 12.8 billion yuan (about US $1.89 billion), a year-on-year decrease of 22%, mainly due to the reduction of content cost, flow acquisition cost and commodity sales cost.

Sales, general and administrative expenses were 4.7 billion yuan (about 692 million US dollars), an increase of 1% over the same period last year.

R & D spending was 4.6 billion yuan (US $673 million), down 3% from the same period last year.

Operating profit in the third quarter was 6.156 billion yuan (US $907 million), up 161% from 2.355 billion yuan in the same period last year. The operating margin was 22%, compared with 8% in the same period last year. Baidu core’s operating profit is 7.4 billion yuan (about 1.09 billion US dollars), and the operating profit margin is 35%.

In the third quarter, the operating profit was 7.636 billion yuan (about 1.125 billion US dollars), an increase of 107% compared with the same period last year; the operating profit margin was 27%, higher than 13% in the same period of last year. Not in accordance with US GAAP, baidu core’s operating profit is 8.5 billion yuan (about US $1.25 billion), and its operating profit margin is 40%.

Other gains were 8.9 billion yuan (about $1.31 billion), compared with 9.5 billion yuan in other losses over the same period last year. Baidu suffered other losses in the third quarter of 2019, mainly because the equity investment, including long-term investment, lost RMB 9billion in fair value.

Income tax expenditure was 1.6 billion yuan (about 239 million US dollars), compared with 934 million yuan in the same period last year.

Net profit attributable to Baidu in the third quarter was 13.678 billion yuan (US $2.015 billion), compared with a net loss of 6.373 billion yuan in the same period last year. In the third quarter, Baidu’s diluted earnings per ADR share were 39.79 yuan (US $5.86), compared with 18.37 yuan per share in the same period last year.

Not in accordance with US GAAP, Baidu’s net profit in the third quarter was 6.988 billion yuan (about 1.029 billion US dollars), up 59% year on year. In the third quarter, the diluted earnings per American Depository Receipt attributable to Baidu was 20.35 yuan (about US $3.00), up 61% year-on-year.

The adjusted EBITDA, which is not measured in accordance with US GAAP, i.e. the profit before interest, tax, depreciation and amortization is RMB 9.1 billion (about US $1.34 billion), and the adjusted EBITDA rate is 32%. The adjusted EBITDA of Baidu’s core business that is not measured in accordance with US GAAP is RMB 9.8 billion (about US $1.45 billion), and the adjusted EBITDA rate is 46%.

As of September 30, 2020, the total value of cash, cash equivalents, restricted cash and short-term investment held by Baidu was 146 billion yuan (about US $21.5 billion); the free cash flow of Baidu in the third quarter was 6.3 billion yuan (about 925 million US dollars). As of September 30, 2020, excluding iqiyi, the total value of cash, cash equivalents and short-term investments held by Baidu was 138.5 billion yuan (approximately US $20.41 billion). Excluding iqiyi, Baidu’s net free cash flow in the third quarter was 8.3 billion yuan (about $1.22 billion).

Performance Outlook:

Baidu expects total revenue in the fourth quarter of 2020 from 28.6 billion yuan (about 4.2 billion US dollars) to 31.3 billion yuan (about 4.3 billion US dollars), a year-on-year decline of 1% to an increase of 8%. Baidu’s fourth quarter performance forecast only represents the current and preliminary views, and may be adjusted in the future.

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