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Baidu Cruises Past Wall Street View

Shares of Baidu gained in extended trading after the Chinese Web search company topped analyst expectations for its third-quarter results.

NEW YORK (

TheStreet

) --

Baidu

(BIDU) - Get Baidu, Inc. Sponsored ADR Class A Report

got a lift late Thursday after the Chinese Web search company handily beat Wall Street views for its third-quarter results, and gave a better than expected revenue outlook for the current quarter.

After the closing bell, Baidu reported a profit of $156.4 million, or 45 cents per ADR

American Depositary Receipt, for the three months ended Sept. 30 with revenue soaring more than 76% on a year-over-year basis to $337.2 million. The average estimate of analysts polled by

Thomson Reuters

was for earnings of 41 cents a share in the September period on revenue of $333.3 million.

Traffic acquisition cost, or TAC, is an important metric for Baidu, measuring what the company pays partners to generate search traffic. For the latest quarter, TAC totaled $30.2 million, or 8.9% of total revenue. The ratio relative to total revenue declined on a sequential basis from 9.7% in the second quarter and on a year-over-year basis from 15.9% in the same period a year earlier, a trend the company attributed to "faster organic traffic growth."

The stock was last quoted at $105.16, up 2.6%, according to

Nasdaq.com

, on volume of nearly 2.4 million. Based on a regular session close of $102.48, the shares were already up more than 140% so far in 2010.

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"Strong execution on our initiatives to expand our customer base and enhance customer service drove another quarter of strong results," said Robin Li, the company's chairman and CEO, in a statement. "By focusing on continuously improving our online marketing system and customer engagement while building awareness of search engine marketing, we are successfully enhancing Baidu's position as a key enabler of China's Internet industry."

For the fourth quarter ending in December, Baidu forecast revenue ranging from $354.2 million to $364.7 million, noting the view represents year-over-year growth of at least 88%. Wall Street's current consensus estimate is for revenue of $348 million.

At current levels, Baidu's stock is up more than 250% from a 52-week low of $35.30 set last October, but with these latest earnings more than doubling its performance in the year-ago equivalent quarter, Baidu so far seems to be justifying its 2011 forward price-to-earnings ratio of almost 47X.

For reference,

Google's

(GOOG) - Get Alphabet Inc. Class C Report

2011 forward PE ratio is 19.5X, but the company's non-GAAP earnings in the third quarter only rose 30% from year-ago levels, and TAC came in at 26% of quarterly revenue of $7.29 billion.

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Written by Michael Baron in New York.

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