Baidu Posts Strong Earnings, Upbeat Forecast

Search giant sees benefits from economic restart in China.
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Search giant Baidu  (BIDU) - Get Report on Monday posted better-than-expected results for the first quarter and offered an optimistic forecast as economic activity rebounds in China.

Baidu posted adjusted earnings of $1.25 per American depositary receipt on revenue of $3.18 billion.

Analysts had been expecting the company would post 54 cents per ADR and revenue of $3.1 billion.

“With the pandemic coming under control in China, offline activities are rebounding and Baidu stands to benefit from a restart of the Chinese economy," said Robin Li, co-founder and CEO of Baidu, in a statement.

"In March, a month after the peak of COVID-19 new cases, Baidu's traffic remained robust with Baidu App DAUs reaching 222 million, up 28% year-over-year, in-app search queries up 45%, and feed time spent up 51%," Li added.

For the second quarter of 2020, Baidu said it expects revenue between $3.5 billion and $3.9 billion, vs. analyst estimates of $3.62 billion. 

China's economy was largely shut down for much of the first quarter as it dealt with the coronavirus pandemic. 

But even as western economies have fallen into sharp recessions in recent weeks, China has seen a resurgence of economic activity. Stores operated by Apple  (AAPL) - Get Report in much of the country have reopened as has Disney's  (DIS) - Get Report  Shanghai theme park, albeit with sharp limits on the number of daily visitors. 

U.S. stocks rose sharply Monday to their highest closes since early March on positive initial trials of a vaccine candidate and as the U.S. economy begins to make halting efforts at reopening. 

Baidu ADRs rose $9.16, or 8.5% to $116.75 in after-hours trading.