Thursday, October 27, 2011

Baidu (BIDU) Beats by 3 Cents, with a Very Strong Revenue Number

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Baidu (BIDU) just reported and investors are very happy, taking the stock up $12 as I type this (on top of the 6% move in normal hours).  The company beat substantially on top line: $654.7M vs $618.6M, and that led to a 3 cent beat on the bottom line: 86c v 83c.  I would have expected a bigger beat on the bottom line with that magnitude of a revenue beat so I assume operating costs went up more than analysts' models.  That said the market is not looking at such detail and much like an Amazon.com this is very much a revenue growth story.  Full report here.

  • Baidu reported total revenues of RMB4.175 billion ($654.7 million) for the third quarter of 2011, representing an 85.1% increase from the corresponding period in 2010.
  • Online marketing revenues for the third quarter of 2011 were RMB4.174 billion ($654.4 million), representing an 85.1% increase from the corresponding period in 2010. Baidu had approximately 304,000 active online marketing customers in the third quarter of 2011, representing an 11.8% increase from the corresponding period in 2010 and a 2.0% increase from the previous quarter. Revenue per online marketing customer for the third quarter was approximately RMB13,700 ($2,148), a 65.1% increase from the corresponding period in 2010 and a 19.1% increase from the previous quarter.
  • Traffic acquisition cost (TAC) as a component of cost of revenues was RMB334.1 million ($52.4 million), representing 8.0% of total revenues, as compared to 8.9% in the corresponding period in 2010 and 7.9% in the second quarter of 2011.
  • Selling, general and administrative expenses were RMB460.2 million ($72.2 million), representing an increase of 55.4% from the corresponding period in 2010, primarily due to increased personnel costs and marketing expenses.
  • Research and development expenses were RMB382.7 million ($60.0 million), an 86.9% increase from the corresponding period in 2010. The increase was primarily due to increased R&D headcount.
  • Operating profit in the third quarter of 2011 was RMB2.226 billion ($349.1 million), an 88.5% increase from the corresponding period in 2010.
  • Net income attributable to Baidu in the third quarter of 2011 was RMB1.882 billion ($295.0 million), a 79.8% increase from the corresponding period in 2010.
  • Diluted earnings attributable to Baidu per ADS(2) (EPADS) for the third quarter of 2011 were RMB5.38 ($0.84); diluted earnings attributable to Baidu per ADS excluding share-based compensation expenses (non-GAAP) for the third quarter of 2011 were RMB5.49 ($0.86).
 
Guidance
 
  • Baidu currently expects to generate total revenues in an amount ranging from RMB4.410 billion ($691.4 million) to RMB4.535 billion ($711.0 million) for the fourth quarter of 2011, representing a 79.9% to 85.0% year-over-year increase. This forecast reflects Baidu's current and preliminary view, which is subject to change.

Analysts were at $647M next quarter, so its a nice increase in revenue guidance.....

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Technically, very similar situation to the previous entry on Las Vegas Sands - it's been nothing to write home about.  A long consolidation period - after these long consolidation periods you usually have a very nice move... once it starts.  

The chart below does not reflect the after hours action - we're at $150 which were highs multiple times in August and September.



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