The 10-second takeaway
For the quarter ended March 31 (Q1), Baidu met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share grew. GAAP earnings per share increased.
Margins dropped across the board.
Baidu reported revenue of $961.0 million. The 16 analysts polled by S&P Capital IQ hoped for a top line of $967.0 million on the same basis. GAAP reported sales were 42% higher than the prior-year quarter's $676.7 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 $0.95. The 16 earnings estimates compiled by S&P Capital IQ predicted $1.03 per share. Non-GAAP EPS of $0.95 for Q1 were 12% higher than the prior-year quarter's $0.85 per share. GAAP EPS of $0.94 for Q1 were 11% higher than the prior-year quarter's $0.85 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 64.8%, much worse than the prior-year quarter. Operating margin was 37.0%, much worse than the prior-year quarter. Net margin was 34.2%, 1,000 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.19 billion. On the bottom line, the average EPS estimate is $1.30.
Next year's average estimate for revenue is $4.88 billion. The average EPS estimate is $5.27.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,762 members out of 5,371 rating the stock outperform, and 609 members rating it underperform. Among 1,050 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 936 give Baidu a green thumbs-up, and 114 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Baidu is hold, with an average price target of $119.84.
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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 recommends Baidu. The Motley Fool owns shares of 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.