Please ensure Javascript is enabled for purposes of website accessibility

Baidu Beats on Q4 Revenue and Earnings

By Eric Volkman - Feb 18, 2021 at 9:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

But investors clearly weren't impressed with the company's better-than-expected performance.

Shares of Chinese search engine powerhouse Baidu (BIDU -0.69%) traded down by nearly 3.5% on Thursday despite an encouraging fourth-quarter earnings release.

For the quarter, the company earned 30.26 billion yuan ($4.67 billion), which was 5% higher than the Q4 2019 tally. Non-GAAP (adjusted) net income, on the other hand, declined 25% to 1.05 billion yuan ($162 million), or $3.08 per American Depositary Share (ADS) of Baidu.

Happy woman seated at a desk, using a PC.

Image source: Getty Images.

On average, analysts tracking the stock had estimated the company would post revenue that equated to $4.65 billion. Despite the notable bottom-line erosion, they were modeling a per-ADS adjusted net profit of only $2.61.

Baidu has been devoting resources to next-generation artificial intelligence (AI) solutions, which it says should provide significant growth in the near future.

"As we enter 2021, Baidu is well positioned as a leading AI company with strong internet foundation to seize the huge market opportunities in cloud services, autonomous driving, smart transportation, and other AI opportunities," CEO Robin Li said in the earnings announcement.

Baidu is opening its wallet to develop such offerings. Selling, general, and administrative expenses shot 29% higher during the quarter (to 5.1 billion yuan, or $788 million), while spending on research and development rose 19% to 5.7 billion yuan ($880 million). These were major factors in the bottom-line slide.

Baidu proffered revenue guidance for its current Q1. It believes revenue will grow at least 15% on a year-over-year basis to between 26 billion yuan and 28.5 billion yuan ($4.02 billion and $4.40 billion). It did not publish any profitability forecasts, nor did it offer any estimates for the full year.

 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Baidu, Inc. Stock Quote
Baidu, Inc.
BIDU
$124.47 (-0.69%) $0.87

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.