Baidu profit weighed down by offline mobile services push

Its traffic acquisition cost was $340.6 million, bandwidth costs were $340.6 million and content costs were $235.5 million.

Baidu, one of the largest Chinese companies in terms of value that trade on our shores, will report earnings for the second quarter after the close of regular market trading on Monday. The company continues to invest heavily in this key area, and management noted that increased promotional spending for O2O was the primary cause of an 81% rise in selling, general, and administrative expenses during the quarter. “From these new data points and potential impact of Qunar, we confirmed that BIDU’s core search business remains highly profitable with GAAP operating margin of ~60% – even higher than the reported figures in FY10-FY12″.

“SURP”>Baidu Inc. will skirt a global selloff in technology stocks and extend the biggest rally since October amid speculation that its investments in a group-deal site bolstered second-quarter revenue. Baidu’s O2O gross merchandise volume increased 109% from last year to RMB40.5 billion. Barclays restated an “overweight” rating and set a $240.00 price target (down from $255.00) on shares of Baidu in a research report on Monday. The company said its effective income tax rate rose from 15.4% to 19% during the quarter. Baidu’s ADSs trade on the NASDAQ Global Select Market under the symbol “BIDU”. During the same quarter in the prior year, the company posted $1.73 earnings per share. During Q1 2015, the company’s SG&A and R&D expenses grew by 47.2% and 79.1% annually respectively. 707 billion ($759.1 million) for the second quarter of 2015, representing a 4.7% increase from the corresponding period in 2014. The company had revenue of $2.05 billion for the quarter, compared to the consensus estimate of $12.90 billion. The stock’s 50-day moving average is $200.81 and its 200-day moving average is $207.46.

Erica Poon Werkun of UBS commented in a note in early July that Baidu is expected to show top-line growth in the first quarter after the seasonally weak first quarter.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Henry Guo and Eddie Leung have a total average return of 4.0% and 32.1% respectively. Summit Research reissued a “buy” rating on shares of Baidu in a research report on Wednesday, July 22nd.

Baidu, Inc. (NASDAQ:BIDU) is a Chinese-language Internet search provider (ISP). Also, Nomura raised its price target on shares of Sky Plc from GBX 1,070 ($16.70) to GBX 1,150 ($17.95). Riedel Research on the other hand has the lowest price target of $206 with a Hold rating, while EVA Dimensions has assigned a Sell rating.