The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Baidu met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share expanded significantly.
Gross margins shrank, operating margins shrank, net margins grew.
Baidu tallied revenue of $1.00 billion. The 19 analysts polled by S&P Capital IQ predicted a top line of $1.00 billion on the same basis. GAAP reported sales were 52% higher than the prior-year quarter's $654.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.38. The 16 earnings estimates compiled by S&P Capital IQ anticipated $1.28 per share. GAAP EPS of $1.37 for Q3 were 63% higher than the prior-year quarter's $0.84 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 72.9%, 790 basis points worse than the prior-year quarter. Operating margin was 52.7%, 60 basis points worse than the prior-year quarter. Net margin was 48.1%, 300 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.04 billion. On the bottom line, the average EPS estimate is $1.29.
Next year's average estimate for revenue is $3.56 billion. The average EPS estimate is $4.70.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 4,486 members out of 5,110 rating the stock outperform, and 624 members rating it underperform. Among 1,146 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,018 give Baidu a green thumbs-up, and 128 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Baidu is outperform, with an average price target of $163.94.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Baidu. Motley Fool newsletter services recommend Baidu. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.