ZACKSยท2025-08-18 17:21Core Insights - Baidu (BIDU) is set to announce its second-quarter 2025 results on August 20, with expected revenues of $4.06 billion, reflecting a year-over-year decline of 1.54% [1][8] - The consensus estimate for earnings per share is $1.74, which represents a decrease of 39.79% compared to the same quarter last year [1] Revenue and Earnings Performance - Baidu has consistently exceeded earnings estimates in the past four quarters, with an average surprise of 21.64% [2] - The company experienced only 3% year-over-year revenue growth in the first quarter of 2025, indicating limited momentum outside of AI Cloud [3] Key Factors Impacting Q2 Earnings - AI Cloud is expected to be the main growth driver, while advertising and streaming services are likely to negatively impact overall performance [3] - Online marketing revenue fell by 6% year-over-year in Q1 and is anticipated to remain under pressure due to reduced advertiser spending in a challenging macroeconomic environment [4] - iQIYI's revenues declined by 9% year-over-year in Q1 and are expected to continue to negatively affect Baidu's consolidated results [4][8] Product Developments and Market Conditions - Recent product launches, such as ERNIE 4.5 Turbo and PaddlePaddle 3.0, are still in early adoption stages and are not expected to contribute significantly in the near term [5][8] - Rising costs associated with cloud infrastructure and promotional activities are likely to further squeeze profit margins despite some incremental revenue growth [4] Earnings Expectations - Baidu currently has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell), indicating a lower likelihood of beating earnings expectations [6]