Baidu Inc (BIDU) Earnings Preview: What To Expect?

Baidu, Inc (BIDU) Information Technology – Internet, Software & Services | Reports April 28, After Market Closes

Boost Baidu Inc (BIDU) Q1 Earnings – Key Takeaways

The Estimize consensus is calling for earnings per share of $0.81 on $2.30 billion, 3 cents higher that Wall Street on the bottom line and $8 million on the top
Baidu’s robust growth has not translated to the stock value, and in the past 12 months shares have dropped 13.1%.
Baidu is the clear leader in Chinese search and is also emerging as a major player in mobile and video technology
What are you expecting for BIDU? Get your estimate in here!

Baidu is scheduled to report first quarter earnings this Thursday, after the market closes. Baidu is commonly referred to as China’s Google as it controls a dominant position in search engine traffic in the region. Like Google, Baidu has successfully pursued ventures outside of its core search business including online video and recently, self driving cars. Search continues to be the company’s biggest growth driver, both through its mobile app and desktop platform.

Given its stranglehold on the space, it’s not surprising that Baidu continues to top expectations. In fact, the company has beat on both the top and bottom line in each of the past 2 quarters. Last quarter was highlighted by increases in key areas such as monthly active users, mobile users, revenues and operating profits. Mobile search MAUs equaled 657 million for the quarter ending in December, reflecting a 21% increase from the year prior. Unfortunately, Baidu’s robust growth has not translated to the market. In the past 12 months shares of the search giant have dropped 13.1%.

The Estimize consensus is calling for earnings per share of $0.81 on $2.30 billion, 3 cents higher that Wall Street on the bottom line and $8 million on the top. Since its last report, EPS estimates have come down 24% with sales dropping 13%. Compared to a year earlier, profits are expected to fall 33% while revenue could rise as much 13%.

Baidu is the clear leader in Chinese search segment but like its peers in U.S., they have begun to expand their offerings. Mobile and video technology have been Baidu’s fastest growing segments. The company has continued its policy of spinning off promising business units and its video business has been no different. The independent Baidu Video service recently raised $155 million with the hopes that it could reach YouTube’s status in China. Meanwhile, mobile technologies continues to be its fastest growing segment. Baidu has already made substantial investments to build out these offerings and will continue to do so over the next three years. Baidu’s biggest news however, was their announcement that they would be opening a self driving car unit right in Silicon Valley.

That said, Baidu faces a number of risks to earnings which is apparent from the downward revisions for Q1, including higher promotional expenses, heavy spending on mobile and video, and increasing competition on its search platform. While Baidu remains the largest player in the space, they have lost some market share to Qihoo 360, which entered the market in 2012.