NEW YORK – Last week the NASDAQ-listed Chinese internet company, Baidu (NASDAQ:BIDU), released third quarter earnings that beat analyst expectations. For the quarter, the company delivered earnings per share of $ 1.48 on revenue totaling ¥ 8.9 billion (approximately $ 1.46 billion).
While Baidu is a component of the NASDAQ 100, they receive little press in the U.S. This is largely due to the fact that the company’s main operations are in China, but the company is well positioned to dominate the Chinese internet market and potentially compete with Google in other emerging markets.
For analysts, the quarterly results came in above estimates and helped to push share prices up more than 3 percent this week. While analysts had expected earnings per share of $ 1.46, the company delivered $ 1.48 on revenue of ¥ 8.9 billion (approximately $ 1.46 billion), which was also higher than expectations. In the third quarter of 2012, the company delivered earnings per share of $ 1.37 on revenue of approximately $ 1 billion.
While Baidu has managed to expand their earnings considerably in recent years, the company has had to divert some of those profits to develop their mobile strategy. The change to mobile did seem to catch the company off guard earlier this year as they needed to fend of new entrants in the Chinese search space. This caused the company to expand outside of the Chinese market, a move that will difficult could also have a tremendous upside for the company.
However, this will also drive expectations for growth in coming quarters, and there is no guarantee of the company will react to increased competition in mobile and foreign markets. With Baidu trading at more than 30 times their 2012 earnings at the moment, there is an expectation of future growth, but not as much as other internet companies and this could represent the opportunity for savvy investors. In 2012, earnings per share were $ 4.79 while consensus estimates are that earnings will grow less sharply in 2013 and will come in near $ 4.99 per share.
Shares of Baidu closed the week at $ 160.06.