BIDU - Why Baidu Stock Dropped After Earnings
2024-05-16 12:10:24 ET
Shares of Baidu (NASDAQ: BIDU) stock slumped as much as 5.5% this morning, despite beating earnings estimates in its first-quarter 2024 report. Analysts forecast the Chinese internet search giant would earn $2.18 per American depositary share (ADS), adjusted for one-time items , on $4.3 billion in revenue, but Baidu actually earned $2.76 per ADS on sales of $4.4 billion.
As of 10:55 a.m. ET, Baidu is clawing back its losses, but still down about 1%. Is that fair?
Actually, yes, it is fair. Although Baidu beat analyst forecasts for pro forma earnings, the company's earnings as calculated according to generally accepted accounting principles ( GAAP ) fell substantially below the pro forma number -- and below the analyst forecast as well -- only $2.06 per share. These earnings also declined 6% year over year.
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Why Baidu Stock Dropped After Earnings