Baidu, the leading internet search services provider on the mainland, expects to record slower growth this quarter amid a sluggish economy.
The company yesterday forecast revenue in the quarter to December to be between 6.15 billion yuan (HK$7.64 billion) and 6.34 billion yuan, representing a 37.6 to 41.8 per cent year-on-year rise.
"This is below the consensus [market estimate] of US$1.25 billion," JP Morgan Securities said in a report.
It said the lower-than-expected revenue guidance was due to less online advertising spending by its large corporate accounts.
Despite that slowdown, Nasdaq-listed Baidu reported a 60 per cent rise in third-quarter net income to three billion yuan from a year earlier. Revenue rose 50 per cent to 6.25 billion yuan.
Earnings growth was due to a 28 per cent rise in active online advertising customers in the past quarter to 390,000. The average monthly revenue per customer rose 17 per cent to 16,000 yuan.
In a conference call with analysts, Baidu chairman and chief executive Robin Li Yanhong said most of the new customers were small and medium-sized companies. "The spending power of these new players are not as strong as [that of] the existing, or bigger players," he said.
Li said mobile search traffic for Baidu was growing "by triple digits" but added that mobile advertising on the mainland was still not developed.
He said Baidu's brand and advanced technology would help it become the dominant search services provider in this new market segment.
JP Morgan estimated Baidu's capital expenditure this year to reach US$380 million, with a focus on mobile and new cloud-computing initiatives.