Baidu stock surges more than 7% after big profit beat, new $5 billion share repurchase program

The U.S.-listed shares of Baidu Inc.
BIDU,
-0.63%
shot up 7.4% in premarket trading Wednesday, after the China-based internet search and online marketing company reported a big fourth-quarter profit beat and announced a new $5 billion share repurchase program. Net income nearly tripled, to RMB4.95 billion ($718 million), or RMB13.59 per American depositary share (ADS), from RMB1.72 billion, or RMB4.51 per ADS, in the year-ago period. Excluding nonrecurring items, adjusted earnings per ADS of RMB15.25 beat the FactSet consensus of RMB13.83. Revenue inched less than 0.1% lower to RMB33.08 billion ($4.80 billion) from RMB33.09 billion, but was above the FactSet consensus of RMB32.12 billion. Online marketing revenue fell 6% to RMB18.1 billion, hurt by the resurgence in COVID-19 in certain cities in China, while non-online market revenue grew 11% to RMB7.6 billion due to strength in artificial intelligence (AI)-powered and cloud businesses. Separately, the new $5 billion share repurchase program represents about 10% of Baidu’s market capitalization of $49.78 billion as of Tuesday’s close. “In 2023, we believe we have a clear path to reaccelerate our revenue growth, and we are now well positioned to make use of the opportunities that China’s economic recovery offers us,” said Chief Executive Robin Li. The stock has soared 48.1% over the past three months through Tuesday, while the iShares MSCI China exchange-traded fund
MCHI,
-1.07%
has rallied 15.8% and the S&P 500
SPX,
-2.00%
has slipped 0.2%.