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Baidu (BIDU) to Report Q2 Earnings: What's in the Offing?

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Baidu, Inc. BIDU is scheduled to report second-quarter 2021 results on Aug 12.

For the second quarter, the company expects revenues of $4.5-$5 billion, suggesting a growth rate of 14-25% year over year. The Zacks Consensus Estimate for revenues is pegged at $4.76 billion, indicating growth of 29.04% from the year-ago reported figure.

Further, the Zacks Consensus Estimate for earnings is pegged at $1.93 per share, suggesting a decline of 7.21% from the prior-year reported figure.

The company beat estimates in all the trailing four quarters, delivering an earnings surprise of 41.4%, on average.

Baidu, Inc. Price and EPS Surprise

Baidu, Inc. Price and EPS Surprise
Baidu, Inc. Price and EPS Surprise

Baidu, Inc. price-eps-surprise | Baidu, Inc. Quote

Factors to Consider

Baidu’s second-quarter results are expected to reflect gains from expansion in the autonomous driving space. Its growing efforts to equip vehicles with sensors and AI capabilities might have been a tailwind.

Growing traction of the Apollo Go Robotaxi service across China might have hugely favored the company in the second quarter.

Further, continuous upgrade of the Apollo Smart Transportation infrastructure to make connected vehicles is likely to have benefited its performance in the quarter under review.

Robust DuerOS Smart Assistant and growing shipments of Xiaodu Smart Display are anticipated to have aided the to-be-reported quarterly performance.

Strong Internet foundation and growing user engagement are expected have driven growth of the company’s non-advertising segment in the second quarter.

Further, strong efforts toward strengthening Baidu’s AI business are expected to have remained a key catalyst. Growing adoption of Baidu PaddlePaddle, Baidu EasyDL, Baidu Health and Baidu AI PaaS might have been other positives.

Continuous efforts to bolster the mobile search engine and AI tools are anticipated to have contributed to its second-quarter performance.

In addition, strengthening of Baidu's mobile ecosystem is expected to have contributed to growth in the average daily active user base of the Baidu App in the second quarter.

Further, growing adoption of the company’s Managed Page and marketing cloud is likely to have been tailwinds.

Furthermore, the company’s well-performing iQIYI segment — offering online entertainment services — is expected to have contributed well to top-line performance. Solid momentum across iQIYI’s theatre-themed content portfolio might have expanded its subscriber base for the service.

Yet, impacts of higher promotional expenses and heavy spending on new growth areas are expected to have affected the company’s performance in the quarter under discussion.

Further, impacts of increasing competition on the search engine market are anticipated to get reflected in Baidu’s second-quarter results.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Baidu this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

It has an Earnings ESP of +7.96% and a Zacks Rank #5 (Strong Sell), at present.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

Agilent Technologies A has an Earnings ESP of +1.16% and a Zacks Rank of 2, at present.

Cisco Systems CSCO has an Earnings ESP of +1.82% and a Zacks Rank of 3, at present.

Cree CREE has an Earnings ESP of +2.70% and a Zacks Rank of 3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.


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