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Contributors: Douglas McIntyre Jon C. Ogg

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Wednesday, November 01, 2006 Down More After Earnings

Sometimes beating earnings just isn't good enough. If you owned (BIDU) going into earnings today you know what that means. BIDU posted EPS of $0.37, $0.10 better than the $0.27 estimate. Revenues beat also at $30.3 million, but not by as wide of a margin with consensus revenues at $30.2 million. The revenue guidance was the disappointment with the company saying $34 million to $35 million was expected, but consensus is $36.25 million.

The sad thing is that this was the springloaded year, because its revenues were up 170% year-over-year and earnings were up essentially tenfold.

The street was already nervous ahead of the report, because shares of BIDU were down 9%, or -$8.72, to $87.28. Shares are down another -4.2% to $83.65 in after-hours trading. Its 52-week trading range is $44.44 to $96.67, although it looks like shortly after the open today it had traded as high as $99.00.

BIDU still carries a triple-digit P/E on a trailing basis. If you use the $83.65 after-hours price and company meets the $0.91 EPS target for 2006 and the $1.70 target for 2007 it has forward P/E's of 91.9 for 2006 and 49.2 for 2007. We would have adjusted the EPS target up except for the guidance miss on revenues. is still listed as the #4 site as far as web traffic out of Alexa's Top 500.

Jon C. Ogg

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