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Baidu plummets after big earnings beat, disappointing forecast

Chinese internet giant Baidu Inc. BIDU, -0.92% plunged about 12% in late trading Thursday despite reporting nearly twice the profits experts expected, as the company's revenue forecast for the fourth quarter came in lighter than expected. The search company reported third-quarter net income of $1.2 billion, or $3.62 a share, on revenue of $3.54 billion, up 29% from a year ago. After adjustments for share-based compensation and other effects, the company claimed earnings of $3.89 a share, up more than 160% from a year ago. On average, analysts estimated Baidu would report adjusted earnings of $1.96 a share on sales of $3.56 billion. Baidu's fourth-quarter forecast called for revenue of $3.34 billion to $3.52 billion, while analysts on average were projecting revenue of $3.76 billion, according to FactSet. Baidu shares dropped to less than $230 in after-hours trading following the release of the report, after closing with a 0.9% decline at $260.62.


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