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Baidu's second quarter revenue of 26.3 billion yuan net profit fell 62%

via:新浪科技     time:2019/8/20 7:01:20     readed:83

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According to data compiled by Yahoo Finance, 16 analysts on Wall Street on average expected Baidu's second-quarter earnings per share to be $0.87, based on US GAAP. The financial report showed that the diluted earnings per ADS attributable to Baidu in the second quarter was RMB 7 (US$0.96), which exceeded analysts' expectations.

In addition, 17 analysts on Wall Street on average expected Baidu's second-quarter revenue to reach $3.66 billion. According to the financial report, Baidu’s total revenue for the second quarter was RMB 26.3 billion (US$3.84 billion), which exceeded analysts’ expectations.

Main achievement:

- Baidu's total revenue for the second quarter was RMB 26.3 billion (US$3.84 billion), up 1% year-on-year, excluding the impact of the announced divestiture, which was a 6% increase from the previous year and an increase from the previous quarter. 9%. "Baidu Core" (a combination of search services and transaction services) total revenue of RMB 19.5 billion (US$2.85 billion) in the second quarter, down 2% year-on-year, excluding the announced divestiture The impact was 3% year-on-year, an increase of 12% compared with the previous quarter;

- Baidu's second-quarter operating profit was RMB 233 million (approximately US$ 34 million) and its operating margin was 1%. “Baidu Core” operating profit for the second quarter was RMB 2.1 billion (US$307 million) and its operating margin was 11%.

- Not in accordance with US GAAP, Baidu's second-quarter operating profit was RMB 2 billion (approximately US$ 285 million). Not in accordance with US GAAP, Baidu's second-quarter operating margin was 7%. Not in accordance with US GAAP, the operating profit of Baidu Core in the second quarter was RMB 3.5 billion (approximately US$ 508 million). Not in accordance with US GAAP, the operating profit margin of Baidu Core in the second quarter is 18%;

- Net profit attributable to Baidu in the second quarter was RMB 2.4 billion (US$351 million), down 62% year-on-year; net profit margin was 9%. Diluted earnings per ADS attributable to Baidu in the second quarter were RMB 7 (approximately US$0.96). The net profit attributable to Baidu Core in the second quarter was RMB 3.7 billion (US$ 543 million) and the net profit margin was 19%. Excluding share-based compensation expenses (not in accordance with US GAAP), the net profit attributable to Baidu in the second quarter was RMB 3.6 billion (US$ 529 million) and the net profit margin was 14%. Excluding share-based compensation expenses (not in accordance with US GAAP), the diluted earnings per ADS attributable to Baidu in the second quarter was RMB 10 (approximately US$ 1.47). Excluding share-based compensation expenses (not in accordance with US GAAP), the net profit attributable to Baidu Core in the second quarter was RMB 4.7 billion (US$690.3 million), and the net profit margin was 24%;

- Excluding interest, taxes, depreciation, amortization, other non-operating profits, and equity incentive expenses (not in accordance with US GAAP), Baidu's adjusted net profit for the second quarter was RMB 3.4 billion (US$ 489 million) ), accounting for 13% of total revenue. Excluding interest, taxes, depreciation, amortization, other non-operating profits, and equity incentive expenses (not in accordance with US GAAP), “Baidu Core” adjusted net profit for the second quarter was RMB 4.8 billion (approximately 6.94) Billion dollars), accounting for 24% of total revenue.

Executive Comments:

“By benefiting from the rapid development of Baijiahao, smart small programs and other businesses, Baidu’s mobile ecosystem is more prosperous, which not only brings us strong traffic growth, but also expands the number of our partners. In June, Baidu App’s The number of daily users reached 188 million, a year-on-year increase of 27%; the number of monthly users of smart small programs reached 270 million, an increase of 49% from the previous month." Baidu Chairman and CEO Li Yanhong said, "The small assistants continue to maintain strong momentum and the cumulative number of activated devices exceeds 400 million units, a year-on-year increase of 4.5 times; monthly voice queries exceeded 3.6 billion times, a year-on-year increase of 7.5 times. Baidu is providing a cross for content and service providers.Mobile phoneDistribution channels for different platforms such as smart homes and automobiles, we think this will be a huge and exciting new opportunity. ”

“Although facing the challenges of the macroeconomic environment, changes in industry-related policies, and increased competition in the Internet advertising industry, Baidu still achieved solid performance growth in the second quarter, with revenues reaching RMB 26.3 billion, a 9% increase from the previous quarter. Core business revenue increased by 12% quarter-on-quarter.” Baidu Chief Financial Officer Yu Zhengxi said, “With the strong growth of traffic and the continued expansion of the mobile ecosystem, we will focus on improving profitability, improving customer ROI, and bringing shareholders Come to more value."

Operational highlights:

The second quarter earnings report shows that Baidu's mobile ecosystem is more prosperous and powerful. Smart small programs reached 270 million monthly users, an increase of 49% in three months, continuing the strong momentum since the launch a year ago. In addition to long tail information, the smart applet provides users with a wider range of services. With hundreds of content creators reaching 2.2 million, the content produced by these creators can be distributed not only in information streams and short video applications, but also in search.

In the AI ​​field, Baidu maintained rapid growth and gradually expanded its commercialization results. According to data released by Canalys and Strategy Analytics, the small smart speaker has become the No. 1 in the Chinese market for two consecutive quarters, and ranks among the top three in the global market with Amazon and Google.

China FAW has mass-produced Apollo's self-driving taxis in June. Baidu's first auto-driving taxi program in Changsha, Hunan, has steadily advanced; as of June, Baidu's Apollo test fleet has traveled over 2 million kilometers. , covering 13 cities. As of July, Baidu had a total of 204 autopilot road test licenses in China, which is five times that of the second company.

In the first half of 2019, the Baidu AI open platform was widely used, and the number of developers increased to 1.3 million. The download volume of developers of Baidu's deep learning platform, the paddle, increased by 45% in the second quarter of 2019.

As an important member of Baidu's content ecology, iQiyi's user scale has continued to grow. As of June, the number of members reached 100.5 million, a year-on-year increase of 50%, further consolidating its foundation for providing original entertainment content.

financial analysis:

Baidu's total revenue for the second quarter was RMB 26.3 billion (US$3.84 billion), up 1% year-on-year. The impact of the announced divestiture was 6% year-on-year and 9% compared with the previous quarter. %. Baidu's second-quarter network marketing revenue was RMB 19.2 billion (US$2.8 billion), down 9% year-on-year and 9% compared with the previous quarter. Baidu’s other revenues for the second quarter were RMB7.1 billion (US$1.03 billion), a year-on-year increase of 44%, mainly due to the iQiyi membership service.cloud serviceAnd the smart device business is growing strongly.

Baidu’s second-quarter revenue from “Baidu Core” reached RMB 19.5 billion (US$2.85 billion), down 2% year-on-year, excluding the impact of the announced divestiture, which was 3% year-on-year. Compared with the quarter, it increased by 12%. The “Baidu Core” marketing service has experienced weak performance in the top industry sectors, including healthcare, online games, financial services and the automotive/logistics industry. In the second quarter, Aiqiyi’s revenue from iQiyi reached RMB7.1 billion (US$1.04 billion), a year-on-year increase of 15%. iQIYI membership services increased by 38% year-on-year, while online advertising revenue decreased by 16% year-on-year.

Baidu's content cost in the second quarter was RMB 5.8 billion (US$ 847 million), a year-on-year increase of 12%. The year-on-year increase in Baidu's content cost was mainly due to the increase in the content cost of iQiyi, and to a lesser extent due to the growth of Baidu's information stream content network.

Baidu's second-quarter traffic acquisition cost (TAC) was RMB 3.4 billion (US$499 million), a 27% year-on-year increase, mainly due to rising traffic acquisition costs and its expansion to offline digital screens and other areas.

Baidu's bandwidth cost in the second quarter was RMB 2 billion (US$ 298 million), up 32% year-on-year, mainly due to increased demand from information flow, video and cloud services.

Baidu's other revenue costs in the second quarter (including depreciation costs, operating costs, sales taxes and surcharges, and equity incentive expenses) were RMB 4.8 billion (US$ 703 million), an increase of 89% year-on-year, mainly due to smart homes. The cost of goods sold by equipment increased and the depreciation expense increased.

Baidu's second quarter sales, general and administrative expenses were RMB 5.2 billion (US$764 million), a year-on-year increase of 16%, mainly due to increased investment in channels and promotional marketing, as well as increased personnel-related expenses.

Baidu's R&D expenditure in the second quarter was RMB 4.7 billion (US$690 million), a year-on-year increase of 17%, mainly due to the increase in costs associated with R&D personnel.

Baidu's operating profit for the second quarter was RMB 233 million (approximately US$ 34 million) and its operating margin was 1%. “Baidu Core” operating profit for the second quarter was RMB 2.1 billion (US$307 million) and its operating margin was 11%. Not in accordance with US GAAP, Baidu's second-quarter operating profit was RMB 2 billion (approximately US$ 285 million). Not in accordance with US GAAP, Baidu's second-quarter operating margin was 7%. Not in accordance with US GAAP, the operating profit of Baidu Core in the second quarter was RMB 3.5 billion (approximately US$ 508 million). Not in accordance with US GAAP, the “Baidu Core” operating profit margin for the second quarter was 18%.

Baidu's other income in the second quarter totaled RMB 1.2 billion (US$180 million), a year-on-year increase of 69%, mainly due to the increase in income from equity investment and the depreciation of the Renminbi.

Baidu’s second-quarter income tax expense was RMB 416 million (US$ 61 million) compared to RMB 1.1 billion in the same period last year. Baidu's effective tax rate for the second quarter was 28%, compared with 18% for the same period last year, mainly due to the decline in pre-tax income of “Baidu Core” and Iqiyi's inability to confirm the tax revenue from the current losses.

Net profit attributable to Baidu in the second quarter was RMB 2.4 billion (US$351 million), down 62% year-on-year; net profit margin was 9%. Diluted earnings per ADS attributable to Baidu in the second quarter were RMB 7 (approximately US$0.96). The net profit attributable to Baidu Core in the second quarter was RMB 3.7 billion (US$ 543 million) and the net profit margin was 19%. Excluding share-based compensation expenses (not in accordance with US GAAP), the net profit attributable to Baidu in the second quarter was RMB 3.6 billion (US$ 529 million) and the net profit margin was 14%. Excluding share-based compensation expenses (not in accordance with US GAAP), the diluted earnings per ADS attributable to Baidu in the second quarter was RMB 10 (approximately US$ 1.47). Excluding share-based compensation expenses (not in accordance with US GAAP), the net profit attributable to Baidu Core in the second quarter was RMB 4.7 billion (US$690.3 million) and the net profit margin was 24%.

Excluding interest, taxes, depreciation, amortization, other non-operating profits, and equity incentive expenses (not in accordance with US GAAP), Baidu's adjusted net profit for the second quarter was RMB 3.4 billion (approximately US$ 489 million) The proportion of total revenue is 13%. Excluding interest, taxes, depreciation, amortization, other non-operating profits, and equity incentive expenses (not in accordance with US GAAP), “Baidu Core” adjusted net profit for the second quarter was RMB 4.8 billion (approximately 6.94) Billion dollars), accounting for 24% of total revenue.

As of June 30, 2019, Baidu held cash, cash equivalents and short-term investments totaling RMB 137.3 billion (US$20 billion). If iQiyi is excluded, as of June 30, 2019, Baidu holds a total of RMB 120.9 billion (US$17.61 billion) in cash, cash equivalents and short-term investments. Baidu’s free cash flow in the second quarter was RMB 5.6 billion (US$ 871 million). If iQiyi is excluded, Baidu’s free cash flow in the second quarter is RMB 4.9 billion (approximately US$ 710 million).

Performance outlook:

Baidu expects total revenue for the third quarter of FY 2019 to be RMB 26.9 billion (US$3.84 billion) to RMB 28.5 billion (US$4.07 billion), down 5% year-on-year to 1%, excluding The impact of the divestiture was down 1% year-on-year to 5%, compared to 2% to 8% compared to the previous quarter. The business that had previously announced the divestiture had completed the divestiture in 2018, which generated revenue of approximately RMB 1 billion in the third quarter of 2018. Baidu’s forecast for third-quarter results represents only current and preliminary views and may be adjusted in the future.

Note: The RMB exchange rate against the US dollar in this financial report is 6.8650:1.

telephone conference:

After the release of the earnings report, the Baidu management team will hold a financial conference call at 9:15 pm on August 19, 2019 (Beijing time, August 20, 9:15 am). The telephone number of the conference call is as follows:

International: +65 67135090

The Mainland of China: 4006208038

United States: +1 8456750437

United Kingdom: +44 2036214779

Hong Kong, China: +852 30186771

Password: 9480017

After the conference call, until August 27, 2019, you can repeat the call by:

International: +61 2 8199 0299

Password: 9480017

In addition, Baidu website investor relations channel http://ir.baidu.com will broadcast the conference call and provide recordings.

Stock price changes:

On the same day, Baidu's share price rose by 7.52 US dollars in the Nasdaq regular trading, to close at 104.22 US dollars, or 7.78%. In the subsequent after-hours trading at 5:22 pm EST (5:22 am on Tuesday, Beijing time), Baidu shares rose 9.77 US dollars to 113.99 US dollars, or 9.37%. In the past 52 weeks, Baidu's highest price was $234.88 and the lowest price was $93.39.

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