By Senad Karaahmetovic
Shares of Baidu (NASDAQ:BIDU) are up nearly 6% in pre-market today after the search engine reported better-than-expected results.
Baidu reported first quarter revenue of 28.41 billion yuan, up 1% YoY and above the analyst consensus of 27.86 billion yuan. Adjusted profit per American depositary receipt stood at 11.22 yuan, topping the consensus estimates of 5.17 yuan.
Baidu reported 4 billion yuan in adjusted operating profit in Q1, well above the analyst expectations of 1.1 billion yuan. The company reported an adjusted EBITDA of 5.5 billion yuan in the quarter, while analysts were looking for 3.37 billion yuan. The number of monthly active users in the quarter stood at 632 million, also above the expected 629.4 million.
"Since mid-March, our business has been negatively impacted by the recent COVID-19 resurgence in China,” the company commented.
Citi analyst Alicia Yap said Baidu delivered “solid and better than feared” results.
“Thanks to earlier than expected profitable quarter on operating and net profit level for iQiyi, overall Op and Np for total Baidu exceeded expectation by large margin. Separately, we view Baidu’s core revs beat at +4% yoy as solid, attributed to 45% growth in AI Cloud (in-line with our estimate) and 5% beat on online marketing revs which came at -4% yoy vs our forecast of -9% yoy,” Yap said in a note.
{{J.P. Morgan}} analyst Alex Yao praised cost control measures implemented by the Chinese company.
“Both Baidu core and iQiyi have reported better-than-expected margins driven by effective cost control measures, in our view. We believe the sustainability of margins going forward and outlook on its core ad revenue for the next few quarters will be the key investor focus. We expect the share price to react positively to the print,” the analyst wrote.