Chinese search-engine company Baidu.com (NASDAQ:
) released its fiscal fourth-quarter earnings after the closing
bell on Monday. During Tuesday's trading session, the stock has
fallen sharply and was last trading down almost 11 percent to
The company reported non-GAAP earnings per share of $1.31
which came in ahead of Wall Street consensus EPS estimates of
Revenue was $1.017 billion for the quarter, up 41.6 percent
from last year. The revenue results were slightly ahead of Wall
Street analysts' consensus revenue estimates of $101 billion.
"Baidu once again posted solid growth in 2012 amidst
challenging macro conditions," CEO Robin Li said in a statement.
"Similar to the early days of the Internet, this is a time of
boundless innovation, creativity and opportunity in our industry.
We are at the heart of the Internet in China and we're excited to
embrace and lead the next stage of mobile- and cloud-centric
For the first-quarter, Baidu said that it sees revenue between
$945.4 million to $975.9 million. This represents year over year
growth of between 38.1 percent to 42.6 percent. This compares to
current consensus of $967.1 million.
Analysts at Piper Jaffray and Barclays weighed in after the
report. Barclays maintained an Equal Weight rating on the stock
but lowered its price target to $108 from $113.
The analysts wrote that "while Baidu managed to meet
'headline' revenues and EPS expectation, the dilution impact from
iQiyi and stepped-up investment/defensive initiatives has hurt
margins more than expected. In addition, management reaffirms the
'difficult' mobile transition period is likely to take a couple
years and admits that PC traffic growth has slowed, reinforcing
its near-to mid-term challenges with both revenue growth and
Piper Jaffray analysts said that they think the Street needs
to reset its earnings expectations for the company in upcoming
quarters. They wrote that "while revenue expectations are likely
fine, we believe the Street needs to rethink the level of Baidu's
investment in promoting products, the contextual ad network, and
mobile as well as the impact of the QiYi consolidation."
They added that they thought the next 2-3 quarters could be a
transitional period for the company but that they see EPS growth
in FY14 and would own the stock ahead of this acceleration.
Meanwhile, analysts at Stifel Nicolaus downgraded the company
from Buy to Hold.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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