Baidu Earnings: The Good and the Bad

It's been a banner year for Chinese search powerhouse Baidu , whose shares have popped well over 50%.

Source: Baidu.

From the looks of it, the company has shaken off many of the risks that caused investors to shun this amazing growth story for much of 2012 and that made it a uniquely attractive buying opportunity at the time.

Baidu reported its third-quarter earnings this week, and it was mostly business as usual for the Google of China. In sifting through the report, the company's key growth drivers appear to be firmly intact, with the company growing its sales an impressive 42% for the quarter.

However, Baidu did see profit margins also contract meaningfully, as it ramps spending in a big way to solidify its mobile platform and to stave off a growing contingent of competitors led by dominant browser player Qihoo360, which is determined to eat into Baidu's search dominance.

So all in all, what should investors make of Baidu's earnings this week?

In this video, tech and telecom analyst Andrew Tonner breaks down Baidu's most recent earnings report and what it should mean for investors.

Finding the next Baidu today
Motley Fool co-founder David Gardner, founder of the world's No. 1 growth-stock newsletter, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, with you! It's a special 100% free report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains, and click here for instant access to a whole new game plan of stock picks to help power your portfolio.

The article Baidu Earnings: The Good and the Bad originally appeared on

Fool contributor Andrew Tonner owns shares of Baidu. Follow Andrew and all his writing on Twitter: at @AndrewTonnerThe Motley Fool recommends and owns shares of Baidu and Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story