The 10-second takeaway
For the quarter ended June 30 (Q2), Baidu beat expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly. GAAP earnings per share contracted slightly.
Margins contracted across the board.
Baidu tallied revenue of $1.23 billion. The 16 analysts polled by S&P Capital IQ hoped for a top line of $1.20 billion on the same basis. GAAP reported sales were 43% higher than the prior-year quarter's $858.4 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 $1.22. The 11 earnings estimates compiled by S&P Capital IQ forecast $1.21 per share. GAAP EPS of $1.22 for Q2 were 1.6% lower than the prior-year quarter's $1.24 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 65.1%, much worse than the prior-year quarter. Operating margin was 38.4%, much worse than the prior-year quarter. Net margin was 35.0%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.35 billion. On the bottom line, the average EPS estimate is $1.35.
Next year's average estimate for revenue is $4.86 billion. The average EPS estimate is $4.96.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,765 members out of 5,368 rating the stock outperform, and 603 members rating it underperform. Among 1,131 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,032 give Baidu a green thumbs-up, and 99 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 $106.19.
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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.