Baidu (BIDU) will report Q1 earnings after the market closes (16:30 last quarter) with a conference call to follow at 9:15 PM.
Baidu has roughly 2/3 search market share in China. It has a 58% stake in a leading video platform iQiyi (IQ), among other businesses.
S&P Capital IQ consensus calls for Q1 adj. EPS of $0.57 (vs. $2.57 last year) on revs of $3.59 bln (+9% y/y). Q1 Guidance calls for revs of $3.42-3.60 bln.
The large decline appears to be the result of investmetn losses in iQiyi.
BIDU will provide Q2 guidance in the press release. Current Capital IQ Consensus estimates Q2 revs of $4.34 bln (+14% Y/Y).
Last quarter, BIDU beat on both EPS and revs, and provided in-line Q2 revenue guidance. Total revenues of Baidu Core grew 14% to $2.98 billion or 20% excluding divestitures. Content costs increased 96% to $1.07 billion mainly due to iQIYI and, to a lesser extent, BJH accounts, Baidu feeds' content network.
The stcok fell after company warned about 2019 being an investment year with higher marketing promotions and content costs.
The stock hit a three-year low this week.
BIDU has a $54 bln market cap and trades at a forward P/E of 19x vs SOGU with 18% China search market share at 19x, SINA 16x, BABA 27x and TCEHY 31x.
TRADE: JUN121 145P
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