Baidu Plunges 11% as Q4 View Misses

Something is rotten in Chinese Internet land. After a weak forecast from Web portal and games operator Sohu.com (SOHU) this morning, Baidu (BIDU) shares are coming under pressure this evening following better-than-expected profit for Q3 but a Q4 forecast that missed estimates substantially.

Revenue in Q3 rose 39%, year over year, to $187.3 million. Most analysts seem to be regarding that number as “in line, although the latest Thomson One estimate seems to be slightly higher, at $189.6 million.

At any rate, profit per share was definitely much higher than expected. Excluding options expense, profit came in at $2.16 per share, well ahead of the $1.83 estimate.

However, the outlook is ugly. For Q4, the company forecast revenue of $174 million to $180 million, short of the $203 million average estimate.

In the press release, management said that it foresaw modest year over year revenue growth because the company is switching customers to a different online marketing system, called Phoenix Nest. So it would seem the switchover is the main source of a disruption in revenue for the quarter.

A conference call with analysts is scheduled for 8 pm Eastern, and if you like, you can check in at 1-617-213-8892, passcode 90901274, for the U.S., U.K., and Hong Kong. Other numbers are listed on the press release linked to above, for those outside the U.S., U.K., and Hong Kong.

Baidu shares are down $46.73, or 11%, at $386.24.