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Investing

The Cautious Euphoria in Baidu Earnings (BIDU)

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By Douglas A. McIntyre Updated Published
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We had said in our detailed preview that this was a make or break quarter for Baidu Inc. (NASDAQ: BIDU).  So far it looks like the investment community is taking it as a ‘make it’ quarter.  The leader of online search in China posted earnings of $1.80 non-GAAP EPS and $184.7 million in revenue versus Thomson Reuters estimates of $1.68 EPS and $180.02 million in revenues.  The company gave guidance for next quarter of $176 million to $181 million in revenues, while Thomson Reuters estimates were $170.23 million.  The more important data is in the breakdown of the numbers, as well as what the price means if it stays this high in price.

The Chinese search giant ended the last quarter with $671.1 million in cash and cash equivalents.  Traffic acquisition cost was 16.0% of total revenues versus 14.6% a year earlier and versus 15.3% in the earlier sequential quarter.

Online marketing revenues were $184.6 million, a gain of 39.8% from a year earlier; the company had about 223,000 active online marketing customers, up about 13.2% from a year earlier and a 3.2% increase from the previous quarter.

Baidu had a mysterious drop at the end of the trading day and shares closed down 1.85% at $435.01.  In the after-hours session we have shares trading up 9% at $471.84.  We’ll have to double-check this, but anything above $470.25 looks like an all-time high.  Until the data is heard from the conference call where the company can forecast its win from the Google-China fight, we’d consider this one unfinished business.

JON C. OGG

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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