Chinese search engine giant Baidu Inc stated, its first quarter revenues could fall as much as much as 13% from a year earlier following the coronavirus epidemic which has slammed the brakes on China’s economic activity.
Baidu expects its first quarter revenues to be in the range of $3 billion to $3.3 billion (21 billion yuan and 22.9 billion yuan), falling short of an average estimate of 23.1 billion yuan, according to data from Refinitiv.
The higher end of the forecast range represents a decline of 5% from a year earlier.
“The rebound of the economy after the outbreak will continue to be a long-term project,” said Robin Li, Baidu’s CEO in an internal letter.
The potential fall in its first quarter revenues, especially from its core advertising business, was steep, with Baidu forecasting a slide of 10% to 18%.
“Baidu will also struggle more than other internet companies in China due to its greater reliance on the advertising market,” said Haris Anwar, an analyst at Investing.com.
The extension of China’s Lunar New Year holidays along with quarantine measures to curb the outbreak which resulted in the closure of shops, has resulted in its offline advertising business being hit particularly hard.
Executives from the company however stressed that they believe, a gradual pick up in business is underway and that advertising demand is likely to rebound on the epidemic ends.
“At Baidu, our employees are gradually returning to the office, applying strict safety measures. We assume businesses across China will do the same, and that our marketing services will pick up at a faster pace into quarter end,” said Herman Yu, Baidu’s Chief Financial Officer in an earnings call.
References:
reuters.com
Baidu expects its first quarter revenues to be in the range of $3 billion to $3.3 billion (21 billion yuan and 22.9 billion yuan), falling short of an average estimate of 23.1 billion yuan, according to data from Refinitiv.
The higher end of the forecast range represents a decline of 5% from a year earlier.
“The rebound of the economy after the outbreak will continue to be a long-term project,” said Robin Li, Baidu’s CEO in an internal letter.
The potential fall in its first quarter revenues, especially from its core advertising business, was steep, with Baidu forecasting a slide of 10% to 18%.
“Baidu will also struggle more than other internet companies in China due to its greater reliance on the advertising market,” said Haris Anwar, an analyst at Investing.com.
The extension of China’s Lunar New Year holidays along with quarantine measures to curb the outbreak which resulted in the closure of shops, has resulted in its offline advertising business being hit particularly hard.
Executives from the company however stressed that they believe, a gradual pick up in business is underway and that advertising demand is likely to rebound on the epidemic ends.
“At Baidu, our employees are gradually returning to the office, applying strict safety measures. We assume businesses across China will do the same, and that our marketing services will pick up at a faster pace into quarter end,” said Herman Yu, Baidu’s Chief Financial Officer in an earnings call.
References:
reuters.com
