Baidu beats Wall Street profit expectations

SAN FRANCISCO (Reuters) - Chinese Internet search leader Baidu Inc (BIDU.O) outpaced Wall Street's profit expectations in the first quarter and forecast higher-than-expected sales in the current quarter, sending its shares up 4.5 percent in after-hours trading.

While Baidu's sales growth has slowed from its historical pace, Pali Research analyst Tian Hou said the company nonetheless outperformed the low bar it had set for itself.

Earlier this year, Baidu said its growth would moderate in the first quarter because of the weak Chinese economy and a decision to remove paid listings of unlicensed medical companies from its site. According to Hou, China's economy has improved in March and April.

"If you look at China's market there's a rebound. If you look at Baidu, there's better performance than expectations. And also if you look at the pools of investable stock from the China Internet space, you really don't have a lot," said Hou.

Shares of Baidu rose $10.14 to $235 in after-market on Monday. The stock is up more than 70 percent since February.

For the current quarter, Baidu forecast revenue between $157 million and $161 million, compared to the $146.1 million forecast by Reuters Estimates.

Baidu trails Google and Yahoo in Internet search worldwide, but is the No. 1 player in China according to research firm comScore.

Google stepped up its efforts in China last month, with the introduction of free downloads of licensed music.

Baidu said its first-quarter earnings rose to $26.5 million, or 76 cents per share, compared to $20.9 million, or 60 cents a share, in the same period last year.