The company, dubbed as China’s answer to Google, will be reporting results for the fourth quarter on Thursday after the market closes
Earlier, the management had issued below-consensus revenue estimate for the December quarter while reporting the third-quarter results that beat analysts’ forecast. In the third quarter, earnings rose to $2.77 per share on revenues of $4.11 billion.
Also see: iQiyi to post Q4 earnings on Feb 21
Though Baidu has a history of beating Wall Street forecasts, the trend might not be sustained this time considering the changed market scenario and the slowdown in the Chinese economy. With WeChat, the multi-purpose messaging app from Tencent, all set to launch its own search service, Baidu’s market share could come under pressure. Once it hits the cyberspace, WeChat will become as big a threat to Baidu as the proposed re-entry of Google and Bing into the Chinese market.
Complementing the negative view is the growing concerns that Baidu is no longer a public search engine where unbiased search results are delivered. Rather, it allegedly operates as a search engine for its own sponsored content.
That the stock is yet to recover from the recent multi-year lows is a positive factor when looking at it from an investment perspective. The stock seems to have hit a bottom. After rising to a record high and holding steady in the first half of last year, the shares suffered a series of selloffs in the second half marked by steep intra-day falls. On Tuesday, they traded about 31% lower compared to the levels seen a year ago.