Baidu stock spikes after destroying earnings expectations

Baidu Inc. BIDU, +3.15%far surpassed profit expectations in an earnings report released late Thursday, sending shares up more than 7% in after-hours trading. The Chinese internet giant reported first-quarter net income of $1.1 billion, or $2.98 a share, on revenue of $3.33 billion, up from $2.45 billion a year ago.

After adjustments that were dominated by a post-IPO value change in the company's ownership of iQiyi Inc. IQ, +4.11%Baido reported adjusted earnings of $2.60 a share. Analysts on average expected adjusted earnings of $1.66 a share on sales of $3.32 billion. Baidu disclosed that it plans to sell a majority equity stake in its financial-services business as well. Baidu's U.S.-traded ADSs increased about 7% immediately after the report was released after closing with a 3.2% gain at $238.69. Shares have increased 27.9% in the past year, as the S&P 500 index SPX, +1.04%has gained 10.6%.