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Baidu (BIDU) to Report Q1 Earnings: What's in the Offing?

Zacks Equity Research
·4-min read

Baidu, Inc. BIDU is scheduled to report first-quarter 2021 results on May 18.

For the first quarter, the company expects revenues of $4-$4.4 billion. The Zacks Consensus Estimate for revenues is pegged at $4.16 billion, indicating growth of 30.5% from the year-ago quarter’s reported figure.

Further, the Zacks Consensus Estimate for earnings is pegged at $1.44 per share, suggesting growth of 15.2% from the prior-year reported figure.

The company beat estimates in all of the trailing four quarters, delivering an earnings surprise of 57.46%, 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

Factor to Consider

Gains from Baidu’s expanding footprint in the autonomous driving space are expected to get reflected in the to-be-reported quarter’s results. The growing traction of the Apollo Go Robotaxi service and robobus fleet across China is likely to have hugely favored the company in the first quarter.

Additionally, the introduction of intelligent vehicle solutions for automakers and several high-end intelligent driving products is anticipated to have been a positive.

Further, growing efforts toward strengthening Baidu’s AI business are expected to have remained the key catalyst. The company’s robust DuerOS voice assistant and Baidu Cloud are anticipatedto have benefited the performance of the business in the quarter under review.

Notably, DuerOS skills store offers more than 4,400 skills across various genres. Furthermore, Baidu’s increasing momentum across XiaoduPods, which is powered by DuerOS 6.0, is anticipated to have been a tailwind.

Apart from this, sustained efforts to bolster the mobile search engine and AI tools are anticipated to have contributed to first-quarter performance.

Moreover, the 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 first quarter. Moreover, hosted solutions on the Baidu App are expected to have driven the Baidu Core segment in the to-be-reported quarter.

In addition to these, the company’s well-performing iQIYI segment, which offers online entertainment services, is expected to have contributed well to the to-be-reported quarter’s performance.

Also, robust quantum computing offerings of the company, including Quantum Leaf and Quanlse, are expected to have aided its presence in the cloud computing space in the quarter under review.

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

What Our Model Says

Our proven model doesn’t 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.

Baidu has an Earnings ESP of -0.58% and a Zacks Rank #5 (Strong Sell).

Stocks to Consider

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

Digital Turbine APPS has an Earnings ESP of +6.98% and it sports a Zacks Rank of 1 at present.You can see the complete list of today’s Zacks #1 Rank stocks here.

Pure Storage PSTG currently has an Earnings ESP of +10.81% and a Zacks Rank of 2.

NVIDIA NVDA has an Earnings ESP of +2.51% and a Zacks Rank #2at present.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Baidu, Inc. (BIDU) : Free Stock Analysis Report

Pure Storage, Inc. (PSTG) : Free Stock Analysis Report

Digital Turbine, Inc. (APPS) : Free Stock Analysis Report

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Zacks Investment Research