Baidu delivered some rare (and unaudited) good news yesterday—profits leaped 47% in the second quarter of 2017 with mobile revenue surging to 72% of total revenues. Shares rose 7.2% on the news, which came the same day as fellow Chinese majors Alibaba and JD broke market cap records.
The search giant’s operating profit rose 47% to RMB 4.21 billion ($621 million) compared to Q2 2016, on a net income increase of 83% to RMB 4.415 billion ($651 million). Total revenues in the second quarter of 2017 were RMB 20.874 billion ($3.08 billion), a 14.3% increase from the corresponding period in 2016.
Mobile revenue represented 72% of total revenues for the second quarter of 2017, compared to 62% for the corresponding period in 2016. iQiyi was picked out in the report as having improved its margins, despite Baidu’s content costs as a component of cost of revenues increasing from 9.3% of total revenues in 2016 to 14.9% this year (RMB 3.112 billion). This year-on-year increase was mainly due to iQiyi’s increased content costs, according to the report.
The company’s release quoted Robin Li, Baidu’s Chairman and Chief Executive Officer, as saying:
“In the second quarter, Baidu announced our new mission to make a complex world simpler through technology. To achieve our mission, we will execute on two strategic pillars: to strengthen our mobile foundation and lead in AI. We will use AI as a fundamental driver to elevate our current core business, specifically our core products of Mobile Baidu, search and feed. In parallel, we will continue to build out our newer AI-enabled initiatives through an open platform and ecosystem approach to capture long term economic opportunity.”
This makes a change for Baidu which is generally better at generating bad news, from its advertising scandals (which it says are in the past), loss of top personnel (and again) to even deciding to sue GQ for poking fun at its maps. However, with results like these, it may at least shake off the mantle of “the Yahoo of China.”