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Baidu (BIDU) to Report Q3 Earnings: What's in the Cards?
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Baidu, Inc.’s (BIDU - Free Report) third-quarter 2020 results are expected to reflect strength across the search engine, Apollo Go and artificial intelligence (AI) business. In the last reported quarter, it delivered an earnings surprise of 49.6%.
The stock outperformed earnings estimates in each of the trailing four quarters, with the average being 47.1%.
Baidu expects total revenues in the range of RMB26.3 billion (or $3.7 billion) to RMB28.7 billion (or $4.1 billion), down 6% to up 2%. The Zacks Consensus Estimate for revenues is pegged at $3.92 billion.
The consensus mark for earnings is pegged at $1.85 per share, implying an increase of 5.1% from the year-ago reported figure.
Performance in the Last Reported Quarter
Baidu reported second-quarter 2020 non-GAAP earnings of $2.08 per share, which surpassed the Zacks Consensus Estimate by 69 cents.
Revenues of RMB26 billion ($3.69 billion) were up 15% sequentially but down 1% year over year.
Let’s see how things have shaped up for this announcement.
The company’s efforts to strengthen the mobile search engine and AI technologies are anticipated to have been key catalysts for top-line growth. Strong focus on leveraging the AI platform has been aiding it to provide an improved user experience.
During the quarter, Baidu introduced the latest version of its conversational AI system - DuerOS 6.0. The company unveiled its first portable consumer electronics product, XiaoduPods, which is powered by Baidu's DuerOS 6.0.
The product is expected to have expanded Baidu's reach beyond smart speakers and screens into many new applications, as well as aided top-line growth.
In addition to these, the company released the upgraded Baidu Brain 6.0, the underlying AI infrastructure for Baidu’s industrial applications and cloud platform.
Baidu is expected to have benefited from the expansion of Apollo Go Robotaxi service, which covers roughly 700 kilometers across China, and features about 100 pick-up and drop-off stations across several residential as well as business areas.
In addition to Beijing, the company has made the Apollo Go robotaxi service available in China-based cities of Changsha and Cangzhou.
These measures aided the performance of the open-source autonomous vehicle technology platform, Apollo, in the to-be-reported quarter.
Further, the strengthening mobile ecosystem is expected to have contributed to growth in average daily active user base of the Baidu App during the third quarter. Additionally, strong iQIYI segment — which offers online entertainment services — is expected to have aided the company’s performance.
However, the COVID-19 pandemic’s impacts and China's slowing economy are expected to have hurt advertising sales in the quarter to be reported.
Further, mounting investment costs and increasing competition from players like Alibaba (BABA), as well as Tencent’s (TCEHY) WeChat are likely to get reflected in third-quarter results.
Earnings Whispers
Our proven model does not 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 chances of an earnings beat. That is not the case here.
Earnings ESP: The company has an Earnings ESP of -7.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Baidu has a Zacks Rank #3.
Stocks to Consider
Here are some stocks that you may want to consider, as our model shows that these have the right combination of elements to deliver earnings beat in the upcoming releases.
NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +1.75% and carries a Zacks Rank of 2, currently.
Marchex, Inc. (MCHX - Free Report) has an Earnings ESP of +16.67% and currently carries a Zacks Rank of 2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Baidu (BIDU) to Report Q3 Earnings: What's in the Cards?
Baidu, Inc.’s (BIDU - Free Report) third-quarter 2020 results are expected to reflect strength across the search engine, Apollo Go and artificial intelligence (AI) business. In the last reported quarter, it delivered an earnings surprise of 49.6%.
The stock outperformed earnings estimates in each of the trailing four quarters, with the average being 47.1%.
Baidu, Inc. Price and EPS Surprise
Baidu, Inc. price-eps-surprise | Baidu, Inc. Quote
Third-Quarter Estimates
Baidu expects total revenues in the range of RMB26.3 billion (or $3.7 billion) to RMB28.7 billion (or $4.1 billion), down 6% to up 2%. The Zacks Consensus Estimate for revenues is pegged at $3.92 billion.
The consensus mark for earnings is pegged at $1.85 per share, implying an increase of 5.1% from the year-ago reported figure.
Performance in the Last Reported Quarter
Baidu reported second-quarter 2020 non-GAAP earnings of $2.08 per share, which surpassed the Zacks Consensus Estimate by 69 cents.
Revenues of RMB26 billion ($3.69 billion) were up 15% sequentially but down 1% year over year.
Let’s see how things have shaped up for this announcement.
The company’s efforts to strengthen the mobile search engine and AI technologies are anticipated to have been key catalysts for top-line growth. Strong focus on leveraging the AI platform has been aiding it to provide an improved user experience.
During the quarter, Baidu introduced the latest version of its conversational AI system - DuerOS 6.0. The company unveiled its first portable consumer electronics product, XiaoduPods, which is powered by Baidu's DuerOS 6.0.
The product is expected to have expanded Baidu's reach beyond smart speakers and screens into many new applications, as well as aided top-line growth.
In addition to these, the company released the upgraded Baidu Brain 6.0, the underlying AI infrastructure for Baidu’s industrial applications and cloud platform.
Baidu is expected to have benefited from the expansion of Apollo Go Robotaxi service, which covers roughly 700 kilometers across China, and features about 100 pick-up and drop-off stations across several residential as well as business areas.
In addition to Beijing, the company has made the Apollo Go robotaxi service available in China-based cities of Changsha and Cangzhou.
These measures aided the performance of the open-source autonomous vehicle technology platform, Apollo, in the to-be-reported quarter.
Further, the strengthening mobile ecosystem is expected to have contributed to growth in average daily active user base of the Baidu App during the third quarter. Additionally, strong iQIYI segment — which offers online entertainment services — is expected to have aided the company’s performance.
However, the COVID-19 pandemic’s impacts and China's slowing economy are expected to have hurt advertising sales in the quarter to be reported.
Further, mounting investment costs and increasing competition from players like Alibaba (BABA), as well as Tencent’s (TCEHY) WeChat are likely to get reflected in third-quarter results.
Earnings Whispers
Our proven model does not 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 chances of an earnings beat. That is not the case here.
Earnings ESP: The company has an Earnings ESP of -7.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Baidu has a Zacks Rank #3.
Stocks to Consider
Here are some stocks that you may want to consider, as our model shows that these have the right combination of elements to deliver earnings beat in the upcoming releases.
Advanced Energy Industries, Inc. (AEIS - Free Report) has an Earnings ESP of +1.03% and carries a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +1.75% and carries a Zacks Rank of 2, currently.
Marchex, Inc. (MCHX - Free Report) has an Earnings ESP of +16.67% and currently carries a Zacks Rank of 2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>