Baidu Inc (BIDU) Shares Often Reverse Course The Day After Earnings

Baidu Inc (BIDU) Shares Often Reverse Course The Day After Earnings

Baidu Inc (ADR) (NASDAQ:BIDU) is scheduled to release its next earnings report tonight, and no matter which way the stock moves, the end result may not be much different than before the report came out. MT Newswires (via NASDAQ) notes that historically, the company’s stock has at least narrowed the moves it makes in after-hours trading the day after its earnings report.

Looking at Baidu’s history

They note that Baidu Inc (ADR) (NASDAQ:BIDU) shares have declined in after-hours trading in 12 of the last 34 quarters after the company’s earnings report. Seven of the quarters, making it 58% of the time, Baidu shares have reversed their downward course in the next day’s regular trading session.

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On the other hand though, Baidu Inc (ADR) (NASDAQ:BIDU) has gained in 22 of the last 34 after-hours trading sessions in connection with earnings report. The stock either reduced or simply reversed direction in 13 of the quarters of 59% of the time during the next regular trading session.

What to expect in Baidu’s earnings report

When Baidu Inc (ADR) (NASDAQ:BIDU) reports tonight, analysts are expecting the Chinese company to report earnings of between 94 cents and $1.02 per share on revenue of around $1.5 billion for the quarter. This would be a decline, which wouldn’t be a total surprise because the Internet company has been heavily investing in mobile technology. However, it would also be the first decline in four years. Sales are expected to rise by about 60% though, indicating expectations of continued growth.

Baidu Inc (ADR) (NASDAQ:BIDU) has been especially focusing its marketing campaigns on mobile users because most of the growth in Internet has come in mobile. The company reported 100 million active mobile users at the end of 2013. Of Baidu’s total fourth quarter revenue, 20% came from mobile, which is a significant increase from just a couple of quarters before that. The company’s mobile platform holds 40% of China’s market share, although Baidu is wary of competitor Qihoo 360 Technology Co Ltd (NYSE:QIHU).

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