Baidu (BIDU) Stock Slumping Following Earnings Release, Soft Revenue Guidance

Excluding share-based compensation expenses, adjusted net income for the latest quarter was RMB4.02 billion or RMB11.19 per share. The company had revenue of $2.67 billion for the quarter, compared to the consensus estimate of $16.55 billion.

“With Baidu’s cornerstone search business delivering solid growth and enjoying ample runway ahead, and with powerful mobile gateways to leverage, we are ideally positioned to capture the O2O e-commerce opportunity and build the “Next Baidu”, company chairman and CEO Robin Li said in a statement. In its press release last quarter, the company had guided for 2QFY15 revenue to be in the $2.64-2.7 billion range, showing that the company reported results in line with its own guidance range. We are delighted by the progress we have achieved and are confident that these investments will generate long term shareholder value.

Analysts will be focusing on revenue growth, which has seen a decline in the recent quarters.

Online marketing revenues increased 37.1% to RMB16.227 billion.

Shares of Baidu Inc. That would be $0.62 higher from $1.22 per share posted last quarter and $0.09 higher the $1.75 posted in the 2Q/14. In addition, the company has ramped up investments in services like movie ticketing, delivery of food and services and online payments-Baidu Wallet. Revenue per online marketing customer for the second quarter was approximately RMB27,400 ($4,419), a 13.2% increase from the corresponding period in 2014 and a 15.1% increase compared to the first quarter of 2015. The year-over-year increase was mainly due to iQiyi’s increased content costs.

Research and development costs in the same period were up 56.2 per cent year on year to 2.713 billion yuan as the company hired more personnel in this field.

As of June 30, 2015, the Company had cash, cash equivalents and short-term investments of RMB74.959 billion ($12.090 billion).

Another area which would be of interest to investors is the company’s expenses.

Separately, TheStreet Ratings team rates BAIDU INC as a Buy with a ratings score of B.

Baidu (NASDAQ:BIDU)’s stock had its “buy” rating restated by equities researchers at Summit Research in a research report issued on Wednesday, Analyst Ratings.Net reports. Vetr downgraded shares of Baidu from a “strong-buy” rating to a “buy” rating and set a $225.89 price objective for the company.in a report on Tuesday, July 21st. The stock has a 50-day moving average of $200.76 and a 200-day moving average of $207.56.

Shares of Baidu, Inc. The company has an average rating of “Buy” and a consensus target price of $239.87.

While the Chinese market flash crash has been well publicized, the other macro issue is the Chinese governments so called Great Wall (of Censorship) which censors/restricts internet search results frustrating users of the site both in China and overseas.