Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member., Inc. (BIDU) Can Do Better

Page 1 of 2

The sky isn’t falling at, Inc. (NASDAQ:BIDU) , but it’s also not as blue as it used to be.

China’s leading search engine posted ho-hum quarterly results on Monday after the market close. Revenue soared 42% to $1.02 billion, and that’s just ahead of the $1.01 billion that Wall Street was targeting.

Baidu (BIDU)Bulls will argue that this is the most important takeaway from the report. In its first full quarter butting heads with Qihoo 360 Technology Co Ltd (NYSE:QIHU) since the browser and security software specialist launched its own platform, Baidu didn’t miss a beat. Users stuck around. Advertisers did, too. Baidu closed out 2012 with 406,000 marketing customers. Not only is that 31% ahead of where it was a year earlier, but the average sponsor is spending 8% more.

The good news begins to deteriorate after that.

Expenses across most of the vital categories — bandwidth, content, SG&A, R&D — all grew faster than revenue. The end result is that operating profit climbed just 24% during the quarter. Net income did manage to surge 36% to $1.28 a share. That may be in line with analyst expectations, but that figure was padded by a one-time gain related to its step acquisition of video-streaming website iQiyi.

Don’t expect that to be the last Baidu acquisition. The company has $5.2 billion in cash and marketable securities at a time when it helps to diversify.

Its guidance for the current quarter is disappointing, though it could’ve been worse. The dot-com giant is forecasting $945.4 million to $975.9 million in revenue. Yes, that’s a 4% to 7% decline sequentially, but earlier in the day Inc. (NASDAQ:SOHU) announced that its Sogou search platform would be posting a 12% to 17% sequential decline on the top line.

Analysts were braced for the seasonal dip, but the midpoint of Baidu’s range is below the $967.1 million that Wall Street was modeling.

Baidu survived — and that’s certainly commendable in this kind of climate — but the stock needs the company to thrive if it wants to resume its winning ways.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!