CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Baidu’s share price spiked 7.78% higher after Q2 sales top estimates

The group posted a 1.4% increase in revenue for the three months ended June, at 26.33 billion yuan (US$3.73 billion), higher than analysts' estimates of 25.8 billion yuan.

China’s online-search giant Baidu surprised analysts on Monday with a quarterly revenue that beat estimates as the firm held on to its advertising numbers despite intense competition from rivals and a slower macroeconomic environment.

The group posted a 1.4% increase in revenue for the three months ended June, at 26.33 billion yuan (US$3.73 billion), it said in the results statement after trading hours on Monday. The performance was higher than analysts' estimates of 25.8 billion yuan.

Shares of Baidu rose as much as 10% in extended trading on Monday, before settling 7.78% or US$7.52 higher, at US$104.22.

The Nasdaq-listed shares have faced some severe headwinds brought on by weak advertisement revenue projections amid the slow economic growth in China and aggressive competition. Year-to-date, Baidu’s shares have fallen by 35.8%, from US$162.25 on January 2, 2019.

‘Facing severe outside challenges and a weak macro environment, the company has initiated a series of ground-breaking changes from top to bottom, involving company structures, personnel moves and business consolidation…Despite periodic pain, these changes will have positive and profound impact, enabling Baidu to walk farther and steadier,’ the group’s chief executive Robin Li had said in a letter to employees after the results.

The group’s revenue of its core businesses grew 12% from a year ago. Net income meanwhile, fell to 2.41 billion yuan.

Revenue from Baidu’s video streaming service iQiyi rose by 15% to 7.11 billion yuan, as the service passed the 100 million subscriber mark in June this year, despite tough competition from rivals such as ByteDance’s TikTok.

Sales from its online marketing services, a significant contributor to overall sales however, fell 9% to 19.2 billion yuan, due to tighter advertisement regulations by the government and the impact from the China-United States trade war.

Baidu said it expects its overall revenue for the current quarter to be between 26.9 billion yuan to 28.5 billion yuan.

As the country’s internet advances, the 19-year old firm has to deal with competition from new contenders. It recently toppled off the list of China’s five most valuable internet companies, according to Bloomberg, after it lost more than 40% of its market value this year.

In the previous quarter, Baidu posted its first quarterly loss since 2015, the year it got listed. The announcement caused Baidu’s shares to shed more than 15% in a day.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.