Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
This was one of the 2-3 roughest day of the year for the high growth stocks, and thus far it’s not better in after hours as everyone waits on Apple. Baidu (BIDU) just reported EPS of $0.87 which a bit above estimates of $0.85, but revenue was a tiny bit short at $677M vs $679M expected. Probably the larger issue is guidance of Q2 at $847-867M vs expectations of $860M. The growth continues to be very good (+75% revenue growth), but when I use the term “not impressive” it simply means in relation to estimates. Also Q2 guidance “only” shows 60%ish type of growth – numbers most companies would of course die for. It’s all relative.
Traffic acquisition costs actually fell as a % of revenue, which is a positive:
- Traffic acquisition cost (TAC) as a component of cost of revenues was RMB331.3 million ($52.6 million), representing 7.8% of total revenues, as compared to 8.2% in the corresponding period in 2011 and 7.9% in the fourth quarter of 2011.
The stock is taking it on the chin in after hours, down an additional 10% from where it closed. Full report here.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
