Baidu, China’s search engine market leader, is to buy back up to $1 billion of its own shares, the company announced Thursday (local time).
The NASDAQ-listed company said that its board had authorized the buyback program under which it may repurchase shares over the next 12 months. “The proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions,” it said.
The move is in line with the share price support moves made by many companies that are listed in China, and which have been battered by huge share market volatility in the past six weeks.
The move may also be interpreted as a sign of management confidence following this week’s corporate earnings report, which disappointed many financial analysts and investors.
Reporting the April to June second quarter, Baidu said revenues were up 38% at $2.67 billion, but that net profits of $591 million, were up only 3%.
The company showed blamed margin decrease on the cost of building its online to offline activities, lower profitability on search and rising content costs at online video subsidiary iQIYI.
Baidu’s ADR shares stood at $197.96 prior to Tuesday’s results announcement, but tumbled by some 14% to 170.10 afterwards.
At current prices the company is valued at $59.6 billion.