Chinese Web services giant Baidu Inc. announced its revenue rose 48 percent in the fourth quarter, but its outlook for the current quarter fell below expectations of investors, causing shares to go down nearly 10 percent in after-hours trading.
Baidu's fourth-quarter revenue was 14.05 billion yuan ($2.26 billion), missing market forecasts of 14.12 billion yuan, according to a report from the BBC on Thursday.
The company, which is often referred to as China's Google, also foresees revenue for the current quarter to reach 13.07 billion yuan, well below the market forecast of 13.62 billion yuan.
In a statement, Baidu said that it expected its growth for the current quarter to slow due to the timing of this year's Lunar New Year in late February, as the holiday leaves a short window for business activity to bounce back before the end of the quarter.
Traffic on mobile devices is expected to be robust during the holiday season with hundreds of millions of people traveling to their homes and back, although advertising and paid search services are not as profitable on mobile as they are on desktop PCs, Baidu's executives said.
"For the upcoming quarter, our guidance reflects the combined impact of both the late timing of Chinese New Year this year and mobile's growing traffic contribution, which monetizes at a rate lower than that of PC," Baidu CEO Robin Li said on Wednesday.
"We expect mobile's monetization rate to trend up throughout the year."
Baidu has also been facing tougher competition on mobile platforms with e-commerce heavyweights Alibaba and Tencent, while rivals Qihoo 360 and Sogou are rising fast in the online search services sector.
However, company officials said that they have been investing heavily in marketing and content in order to remain competitive in mobile devices.
"2015 will be an important year for Baidu as we execute on our plan and invest for the next phase of mobile growth," Li added.
Overall, Baidu reported a profit of 3.23 billion yuan or 9.01 ADS, which is an increase from 2.78 billion yuan or 7.90 ADS a year before.