Shares of Baidu (BIDU) are pointed sharply higher in after-hours trading, with investors cheering the company's fourth-quarter earnings report. The Internet-search issue swung to a profit of $62.7 million, or $1.80 per American depositary share, while revenue jumped 40% to $184.7 million. Analysts were looking for a slimmer per-share profit of $1.69, according to Thomson Reuters.
Looking ahead, BIDU said it expects first-quarter revenue to range between $176 million and $181 million, compared to consensus expectations for revenue of $170 million. This upbeat forecast sent the stock surging to a gain of nearly 9% in electronic trading.
With the sound of Wednesday's opening bell, BIDU will be looking to extend its 52-week rally of more than 215%. The stock has enjoyed the solid support of its 10-week and 20-week moving averages since January 2009, enduring just one daily close below this trendline duo in the intervening months.
Despite the equity's impressive price action, short interest on BIDU escalated by nearly 22% during the most recent reporting period. If this crop of bearish bettors is spooked by the company's strong fourth-quarter performance and rosy first-quarter forecast, a burst of short-covering support could provide a boost to the shares.
Elizabeth Harrow is a senior equities analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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