The next minute, the Co rips through earnings expectations (again) and is trading at $224 in extended hours. Baidu longs have been rewarded.
After taking a pummeling in recent weeks from a high of $215 all the way down to $175, the writing was on the way for a reversal. What writing? China's economy grew at a rate of 11.9% for Q2, and the ripple effect is everywhere. That includes BIDU. Revenues are up more than 100%, as are operating margin and net income.
Investors who collected shares during the recent stock slump are celebrating. Baidu's many bears, meanwhile, are in a bind, to say the least. Baidu CEO Robin Li was as bullish as ever. Here's an excerpt from the press release.
"During the second quarter, we saw robust revenue growth and a healthy increase in online marketing customers," said Robin Li, Baidu's Chairman and CEO. "These results reflect the successful implementation of strategic improvements made over the last two quarters and a growing recognition by Chinese businesses that Baidu's online marketing platform is a highly effective way to reach consumers."
Mr. Li added, "We continued to focus on our long term strategic plan during the quarter by improving our product and service offerings for our customers and users. We also expanded our sales force in key geographic regions to reach a broader and constantly expanding market of new customers."
With a float of just 19 million shares, BIDU's insanely bullish climb may be just beginning. Li, a veteran of the search industry who started at Infoseek many years ago, is proving to be one of the best CEOs, if not the best in China.
Disclaimer: Pupule Paul is a teeny bit long BIDU.
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