Chinese Internet search engine company Baidu Inc. disappointed investors as it posted its fourth quarter and fiscal year 2012 financial results.

Total revenues in the fourth quarter of 2012 were CNY6.335 billion, a 41.6% increase from the corresponding period in 2011. Total revenues in fiscal year 2012 were CNY22.306 billion, a 53.8% increase from 2011.

But Baidu’s traffic acquisition cost as a component of cost of revenues was CNY606.8 million, representing 9.6% of total revenues, as compared to 7.9% in the corresponding period in 2011 and 8.6% in the third quarter of 2012. And administrative expenses were RMB792.4 million, representing an increase of 51.7% from the corresponding period in 2011, mainly due to an increase in marketing expenses and the consolidation of iQiyi into the company’s financial statements.

More importantly, brokers Stifel Nicolaus and Raymond James separately lowered their ratings on Baidu today because of the company’s non-spectacular results and its increased spending. Trading on February 5, 2013, saw Baidu’s Nasdaq stock price dive more than 10% at certain periods in the day.

Baidu’s operating profit in the fourth quarter of 2012 was CNY2.848 billion, a 24.0% increase from the corresponding period in 2011, while its operating profit in fiscal year 2012 was CNY11.051 billion, a 45.9% increase from 2011.

Net income attributable to Baidu in the fourth quarter of 2012 was CNY2.795 billion, a 36.1% increase from the corresponding period in 2011. Diluted earnings attributable to Baidu per ADS for the fourth quarter of 2012 were CNY7.99; diluted earnings attributable to Baidu per ADS excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2012 were CNY8.18.

Net income attributable to Baidu in fiscal year 2012 was CNY10.456 billion, a 57.5% increase from 2011. Diluted earnings attributable to Baidu per ADS for fiscal year 2012 were CNY29.83; diluted earnings attributable to Baidu per ADS excluding share-based compensation expenses (non-GAAP) for fiscal year 2012 were CNY30.44.