By Tracy Qu

Baidu is scheduled to report results for the third quarter on Thursday. Here is what you need to know:

NET PROFIT: The Chinese search-engine company is likely to post net profit of 5.02 billion yuan, equivalent to $693.4 million for the quarter, according to the consensus estimate of 15 analysts in a FactSet poll, down from 6.68 billion yuan a year earlier.

REVENUE: Baidu's revenue is expected at 33.88 billion yuan, according to FactSet, slightly lower than 34.45 billion yuan a year ago.

Hong Kong-listed shares of the Beijing-based company rose 24% in the third quarter, helping pare declines this year to 28%. China's stimulus in late September boosted investors' sentiment in the Chinese and Hong Kong markets, helping the Hang Seng Index rise 16% in the last five trading sessions that month.

WHAT TO WATCH:

--PROFITABILITY: The Chinese internet company likely continued facing pressure on profitability in the third quarter, analysts said. Advertising demand remained weak, reflecting cautious ad-spend sentiment in key verticals including auto, real estate, franchising and healthcare, Citi analysts led by Alicia Yap said in a research note. Baidu also has yet to monetize its AI search, which likely added to pressure on margins, the analysts said.

--AI AND CLOUD: AI and cloud likely maintained strong momentum, driven by rising contributions from generative AI and the foundation model, Deutsche Bank research analyst Leo Chiang wrote in a commentary. The recent organizational change in the personal cloud business is likely to have a temporary impact on growth, Chiang said.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

November 19, 2024 22:56 ET (03:56 GMT)

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