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Baidu Earnings: Why BIDU Stock Is Gaining

The search engine says mobile investments will dampen profits


baidu-stock-BIDU-chinaChinese search engine Baidu (BIDU) issued current quarter revenue guidance that topped analysts’ estimates, sending BIDU stock up almost 3% in Thursday morning trading. Baidu shares had climbed more than 7% in pre-market trading.

Baidu stock rose after the company reported fourth-quarter revenue of 9.52 billion Chinese yuan. That exceeded prior revenue guidance from Baidu that estimated fourth-quarter revenue of between 9.22 billion and 9.48 billion Chinese yuan. Baidu projects first-quarter revenue of between 9.24 billion and 9.52 billion Chinese yuan, which exceeds analysts’ forecasts, the Wall Street Journal notes.

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However, investor excitement was tempered by a warning from Baidu that future profits would be dented by additional investment in the expanding Chinese mobile market. A company official told the Journal that Baidu would “deploy cash aggressively where necessary” to boost its mobile business, especially in mapping services for smartphone users.

During the fourth quarter, Baidu posted a profit that was slightly less than the year-ago period.

BIDU stock closed at $172.90 a share on Wednesday. Baidu stock has gained more than 90% over the past year.

Article printed from InvestorPlace Media,

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