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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Baidu    BIDU

BAIDU

(BIDU)
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Delayed Quote. Delayed Nasdaq - 09/18 04:00:00 pm
108.4 USD   -0.59%
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Baidu : China's Private-Sector Bellwether, Reports 62% Profit Drop -- 2nd Update

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08/20/2019 | 01:17am EDT

By Shan Li and Maria Armental

BEIJING--China's economic downturn helped drive search-engine giant Baidu Inc. to its weakest quarterly revenue growth in more than two years and a 62% profit drop, with the company warning its bread-and-butter advertising business will remain under pressure.

The Beijing-based company, once called the Google of China, has struggled to keep pace in recent years as internet users have migrated to smartphones. Last week, Baidu was knocked out of top five most valuable publicly traded Chinese internet companies after its market capitalization fell below videogames and e-commerce firm NetEase Inc.

Baidu late Monday reported its second-quarter profit dropped 62% to 2.41 billion yuan ($342 million) compared with a year ago. Revenue rose 1.4% to 26.33 billion yuan, surpassing the 25.8 billion yuan forecast by analysts polled by FactSet.

Company shares jumped as much as 9.4% in after-hours trading Monday after Baidu released its better-than-expected results.

Baidu's business, which relies on ads from Chinese retail, health-care and other companies, is considered a gauge for the health of China's private sector. In the first quarter, Baidu reported its first quarterly loss since going public in 2005 as companies cut back on advertising in the face of a broader slowdown in the Chinese economy. Online advertising overall fell 9% in the second quarter to 19.2 billion yuan.

Herman Yu, Baidu's chief financial officer, said advertising revenue will continue to face pressure as sectors such as online games and financial services rein in ad spending. A drive to ensure the accuracy of medical information has also caused advertising revenue relating to health care to drop by double-digits, he said.

"With the current macro situation, it's hard to predict what is going to happen in two quarters," Mr. Yu said during a call with analysts.

Baidu has tried to evolve beyond its search business by pushing into new areas related to artificial intelligence, including autonomous driving and smart speakers.

Its video-streaming platform iQiyi reported revenue growth of 15% to 7.1 billion yuan. That was bolstered by a 38% increase in paying subscribers, while advertising on the platform fell 16% compared with a year earlier. A segment called "other"--which includes its cloud and smart device business--climbed 44% to 7.1 billion yuan.

"The company continues to work on developing new lines of business in the face of an increasingly mature search market," said Mark Natkin, managing director of research company Marbridge Consulting. "But those other lines of business are still minor contributors and are likely to remain so for some time."

Baidu said it expects continued pressure in its current quarter, and forecast that revenue could drop.

Write to Shan Li at shan.li@wsj.com and Maria Armental at maria.armental@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
BAIDU -0.59% 108.4 Delayed Quote.-31.65%
US DOLLAR / CHINESE YUAN RENMINBI (USD/CNY) 0.27% 7.1026 Delayed Quote.3.14%
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Financials (USD)
Sales 2019 15 166 M
EBIT 2019 227 M
Net income 2019 856 M
Finance 2019 12 491 M
Yield 2019 -
P/E ratio 2019 45,2x
P/E ratio 2020 25,0x
EV / Sales2019 1,67x
EV / Sales2020 1,40x
Capitalization 37 782 M
Chart BAIDU
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Technical analysis trends BAIDU
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 35
Average target price 138,28  $
Last Close Price 108,40  $
Spread / Highest target 101%
Spread / Average Target 27,6%
Spread / Lowest Target -0,37%
EPS Revisions
Managers
NameTitle
Yan Hong Li Chairman & Chief Executive Officer
Herman Yu Chief Financial Officer
Ji An Ding Independent Director
Brent Callinicos Independent Director
Yuan Qing Yang Independent Director
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