Baidu poised to beat third-quarter earnings forecast on back of solid search recovery and newsfeed ads

October 23, 2017
Industry News
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Bien Perez
bien.perez@scmp.com

Positive momentum for China’s online search giant also aided by its growing iQiyi video-streaming service and major artificial intelligence initiatives

Mainland internet giant Baidu looks poised to beat market expectations and exceed its own financial guidance with solid earnings growth in the quarter to September, driven by strong recovery in online search and gains in mobile newsfeed advertising.

Nasdaq-listed Baidu, the largest online search provider for China’s more than 750 million internet users, will report its third-quarter financial results at the close of trading in the US market on Thursday.

“We expect Baidu’s revenue to top its previous guidance range, with net profit rising above the market consensus,” Jefferies equity analyst Karen Chan said on Monday.

Jefferies estimated that the Beijing-based company’s third-quarter revenue would total 23.9 billion yuan (US$3.6 billion), up 1.8 per cent from the 23.5 billion yuan average forecast by a Bloomberg survey of analysts.

That would also surpass Baidu’s guidance in July of third-quarter revenue between 23.1 billion yuan and 23.7 billion yuan.

Net profit is expected to reach 4.1 billion yuan, up 9.4 per cent from the market consensus estimate of 3.8 billion yuan, according to Jefferies.

These results would show that Baidu’s core search operations continue to improve this year amid tightened regulation on its online advertising business, following public outrage last year over the death of a mainland student from a cancer treatment he found in an online search.

Baidu’s annual revenue growth slowed down to 6.3 per cent last year, compared with a 35.3 per cent increase in 2015 and 53.6 per cent in 2014.

This year, Baidu is predicted to post a 22 per cent year-on-year jump in revenue growth to about 86 billion yuan, according to market consensus estimates.Continue Reading

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