Baidu Posts Upbeat Q4 Results; Shares Jump 7%

Beijing-based Baidu, Inc. (NASDAQ: BIDU) has posted better-than-expected Q4 results, driven by strong revenues.  

Following the news, shares of the Chinese multinational technology company rose 6.8% to close at $162.86 on Tuesday. The company specializes in internet-related services and products and artificial intelligence. 

Results in Detail 

Baidu posted Q4 adjusted earnings of $1.82 (RMB 11.60) per ADS, versus the consensus estimate of $1.33 per ADS. The company reported adjusted earnings of RMB 20.08 per ADS in the same quarter last year. 

Total revenues of $5.2 billion (RMB 33.1 billion) increased 9% from the year-ago period and beat analysts’ expectations of $5.06 billion. 

Revenue from iQIYI came in at RMB 7.4 billion ($1.2 billion), down 1% year-over-year. Meanwhile, Baidu Core reported revenue of RMB 26 billion ($4.1 billion), up 12%, while online marketing revenue grew 1% to RMB 19.1 billion ($3 billion). 

Also, non-online marketing revenue surged 63% to RMB 6.9 billion ($1.1 billion), on the back of cloud and other AI-powered businesses. 

Other Metrics 

Adjusted EBITDA came in at $903 million (RMB 5.8 billion), down 33% year-over-year. 

In December, Baidu App’s monthly active users (MAUs) stood at 622 million, up 14% year-over-year, while daily logged-in users came in at 82%. 

Selling, general, and administrative expenses were RMB 6.5 billion ($1 billion), up 27% year-over-year. Increased channel spending, promotional marketing, and personnel-related expenses led to the surge in costs. 

Additionally, research and development expenses grew 30% to RMB 7.4 billion ($1.2 billion), on the back of increased personnel-related expenses. 

Full-Year 2021 Results 

For 2021, Baidu recorded adjusted earnings of $8.40 (RMB 53.53) per ADS, compared with earnings of RMB 63.93 per ADS in 2020. Total revenues came in at $19.5 billion (RMB 124.5 billion), up 16% year-over-year. 

Official Comments 

In response to reported results, Baidu CEO Robin Li commented, “Baidu concluded a solid 2021, evidenced by a strong growth in our non-advertising business, particularly the acceleration of Baidu AI Cloud…Furthermore, Apollo Go provided around 213,000 rides in the fourth quarter, almost doubling sequentially, reaffirming our leadership position in the global autonomous ride-hailing market.” 

The CFO of Baidu, Rong Luo, said, “Looking ahead, we remain committed to healthy and sustainable long-term growth as Baidu continues to improve its overall operational efficiency and execution capabilities.” 

Capital Deployment 

In 2021, Baidu returned $1.2 billion to shareholders through share repurchases, including $615 million in the fourth quarter, under its 2020 Share Repurchase Program. 

Wall Street’s Take 

Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average Baidu price target of $258 implies 58.42% upside potential from current levels. However, shares have lost 46.1% over the past year. 

Bloggers Weigh In 

Bloggers seem enthused by the company’s earnings results. TipRanks data shows that financial blogger opinions are 92% Bullish on BIDU, compared to a sector average of 68%.

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