BIDU Reports Solid Earnings
As expected, Baidu (O:BIDU) reported its earnings for the fourth quarter before the opening bell today. However, what wasn't expected was the fact that the company would show strong mobile user growth. Here's what we saw from the earnings report...
- Top Line Revenue – In terms of top-line revenue, BIDU came in ahead of expectations. For the fourth quarter, it was expected that the company would report revenue in the amount of $2.84 billion. However, the company actually produced revenue in the amount of $2.89 billion.
- Earnings Per Share – As far as earnings per share goes, the company didn't do horrible, but didn't do great either. In fact, BIDU narrowly missed analyst expectations. While analysts expected that the company would produce earnings in the amount of $1.19 per share, the company actually produced earnings in the amount of $1.18 per share.
- Users – While neither earnings nor revenue were enough to really excite investors, there was one part of the report that generated quite a bit of excitement. That part of the report was mobile user growth. Mobile is the next big thing for tech, and it's arguable that tech companies in some ways are gauged by the amount of mobile users they have. In the case of BIDU, mobile active monthly users grew in a big way year over year. In fact, year over year growth in the figure was up 21%, now totaling 657 million! Also when it comes to mobile apps monthly active users, we saw year over year growth in the amount of 43%!
All in all, as you can see from the information above, BIDU had an incredibly positive report. Revenue beat, earnings came in just under expectations and mobile users skyrocketed. In a statement, BIDU CEO, Yanhong Li had the following to say...
“2015 was a touchstone year for Baidu: we made significant progress in broadening our online marketing platform and further extending our reach into transactions services.”
How The Market Reacted To The News
As investors, we've learned that any time positive news is released with regard to a publicly traded company, we can expect to see growth in the value of that company's stock. While earnings and revenue weren't quite enough to excite investors, mobile users growth definitely was, and that excitement led to strong growth in the stock today. Currently (10:49), BIDU is trading at $173.55 per share after a gain of $15.33 per share or 9.69% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively bullish expectation of what we can expect to see from Baidu. The reality is that the company is seeing tremendous growth in mobile users and branching into more and more industries that are likely to lead to strong profits in the long run. All in all, I believe we're going to see strong growth from BIDU moving forward!