Baidu Inc (ADR) (NASDAQ:BIDU) released its earnings report for the three months through September 2013 this afternoon after the market closed on Wall Street. The company showed earnings of $1.48 per share for the quarter, which Baidu recorded as the third of 2013, on revenue totaling RM8.9 billion. On today’s market shares in Baidu, trading in New York, trended strongly up today to finish at $159.39.
When a liquidity crisis struck China's Evergrande Group in the summer of 2021, it shook the global markets. Debt payments by China's second-largest property developer by sales were estimated in the hundreds of billions of dollars, and the company missed several payments. Those missed payments led to downgrades by international ratings agencies, but the Chinese Read More
In the lead-up to the release of this earnings report, analysts studying Baidu Inc (NASDAQ:BIDU) were looking for earnings per share of $1.46 from the company on revenue of RM8.8 billion. In the same three months of 2012 the company showed earnings per share of $$1.37 on revenue totaling $1 billion.
Baidu has managed to expand its earnings considerably in recent years, but investors are seeing those gains slow down as the company deals with the change to mobile. The company earned $4.79 per share in 2012, but its earnings aren’t expected to grow by that much for the full year 2013. Analysts are looking for earnings of $4.99 for the full year.
The change to mobile has hit Baidu Inc (NASDAQ:BIDU) hard this year, as has the increase in competition from some new entrants into the Chinese search space. Baidu is looking to expand outside of the Chinese market. The attempt is going to be a challenging one, but it is also lucrative.
The need to increase mobile revenue and make its business a real force outside of China will drive Baidu Inc (NASDAQ:BIDU) expectations for the quarters to come. Competition is also likely to impact expectations. There’s been a quick slowdown in the firm’s desktop search growth, and mobile is not picking up quickly enough to compensate.
Baidu Inc (NASDAQ:BIDU) is trading at more than 30 times is 2012 earnings right now. That number implies the expectation of growth from the company, but not all that much compared to other companies operating on the web. The firm’s stock has increased by close to 60% so far in 2013.
Baidu Inc (NASDAQ:BIDU) executives will host a conference call in order to discuss this earnings report at 8 PM EST. Investors will be wondering about the company’s plans for growth outside of China, and its hopes for increasing growth on mobile.