Baidu Beats by $0.01 on Adjusted Basis; Expenses Rise; Stock Whacked in After-Hours Trading (BIDU 3Q05 Earnings)

Baidu (ticker: BIDU) reported Q3 2005 earnings results today that beat consensus EPS estimates by $0.01. Key stats from the quarter:

Q3 Results
(all percentage changes and comparisons are year on year, unless stated otherwise, assumes conversion of RMB 8.0920 to US $1)

• Total revenue rose 174.4% to $11.0 million, and rose 27.6% sequentially.
• Net revenue rose 172.9% to $10.3 million.
• Online marketing services revenue rose 188.5% to $10.6 million, and rose 28.7% sequentially.
• Other revenue rose 15.5% to $377,000.
• Gross margin was 66.2% vs 68.8%.
• SG&A expenses rose 162.4% to $3.7 million.
• Sales and marketing expenses rose 189.8%% to $2.4 million, and rose 22.7% sequentially.
• Research and development expenses rose 224.0% to $1.4 million.
• Share-based compensation expenses rose 122.9% to $1.3 million.
• Adjusted EBITDA (non-GAAP) rose 176.8% to $3.4 million, and rose 12.1% sequentially.
• Operating expenses rose 163.3% to $6.4 million.
• Operating income rose 172.0% to $855,000, but fell 42.2% sequentially. The sequential decrease was mainly due to share-based compensation expenses and increased server depreciation and bandwidth costs.
• Operating margin remained flat at 7.8%.
• Non-GAAP operating income (excluding share-based comp costs) rose 139.8% to $2.2 million, but remained flat sequentially.
• Net income rose 189.3% to $1.1 million, but fell 29.4% sequentially.
• Net margin was 9.6% vs 9.1%.
• Non-GAAP net income rose 147.9% to $2.4 million, and rose 6.0% sequentially.
• Diluted EPS was $0.03 vs $0.01.
• Non-GAAP (excluding share-based compensation) diluted EPS of $0.07 vs consensus estimate (2 analysts) of $0.06.

Q4 Guidance
(assumes conversion of RMB 8.0920 to US $1)

• Total revenue of $12.6 - $13.1 million. There were no analyst estimates available.

Balance Sheet (as of September 30, 2005)
(assumes conversion of RMB 8.0920 to US $1)

• Cash and equivalents of $119.4 million.

Related

• Baidu's Q2 Results.

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