Do Peers Predict An Earnings Miss At Baidu?

Chinese internet behemoth Baidu Inc BIDU reports earnings on February 12, and investors are hopeful of a big beat. However, the Chinese economy, which has been so strong in the past couple of years, demonstrated some weakness in the second half of 2014.

One way for Baidu shareholders to monitor the current environment for Chinese internet-related stocks is to look at how other names in the group have performed.

Changyou.Com Ltd CYOU: This Chinese online game developer reported earnings of $0.21 per share on February 9, missing consensus estimates by more than 28 percent. Shares of Changeyou dropped 17 percent on the news.

Alibaba Group Holding Ltd BABA: On January 29, Alibaba beat consensus on earnings by 8 percent, but the company’s revenue of $4.22 billion fell short of consensus estimates of $4.45 billion. Shares dropped more than 10 percent on the news.

Related Link: Brean Capital's 12 Chinese E-Commerce Stock Picks

eLong Inc LONG: On February 5, this Chinese online travel service provider reported quarterly earnings of -$0.73 per share, badly missing consensus estimates of -$0.12. Shares of eLong dropped more than 7 percent on the next day of trading.

SouFun Holdings Ltd SFUN: On February 10, the Chinese online real estate and home improvement company reported earnings that beat consensus estimates by 56 percent on a 7.6 percent revenue beat. However, the stock is trading down more than 2 percent so far on Tuesday, possibly due to SouFun’s weak guidance for 2015.

Sohu.Com Inc SOHU: On February 9, the Chinese online media, search and gaming giant reported earnings of -$0.51 per share, slightly missing consensus projections of -$0.49 per share. Despite a revenue beat for the quarter, Sohu shares dropped more than 7 percent on the news.

Baidu Expectations

The consensus estimates for Baidu are earnings of $1.59 per share on revenue of $2.26 billion for the quarter.

Baidu shares are already down more than 4 percent so far in 2015. If the performance of these five other Chinese internet names are any indication of what’s to come, it might be a rough week for Baidu.

Image credit: Simone Brunozzi, Wikimedia