By Tracy Qu

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

NET PROFIT: The Chinese search-engine company is likely to post a 44% jump in net profit to 3.75 billion yuan, equivalent to about $517 million, for the three months ended December, according to the consensus estimate of 13 analysts in a FactSet poll. That would compare with net profit of 2.60 billion yuan in the year-earlier period.

REVENUE: Baidu's revenue is expected at 33.245 billion yuan for the quarter, according to FactSet, slightly lower than 34.95 billion yuan a year ago.

The company's Hong Kong-listed shares dropped 22% in the final quarter of 2024, partly a correction of sharp gains in late September fueled by China's stimulus measures. The stock has recovered some of the losses, gaining nearly 9% this year as enthusiasm around DeepSeek buoys sentiment on Chinese tech companies.

WHAT TO WATCH:

--ADVERTISING: Baidu's revenue from advertising could improve in the current quarter, thanks to the AI-led transformation of search, following an estimated 7% decline in the fourth quarter, according to Citi analysts. Although Baidu's ad revenue growth correlates with the macro and advertiser environment, "the ongoing transformation of AI search is likely bottoming out with potential monetization opportunity," analysts led by Alicia Yap said in a research note.

--AI CLOUD: Revenue growth from its AI Cloud business is expected to accelerate in 2025, driven by AI demand, analysts said. Jefferies estimates that revenue from the segment rose 13% during the fourth quarter. Investors will be looking for management's comments on the competitive landscape of the cloud business, Jefferies analysts led by Thomas Chong said in a research note.

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

(END) Dow Jones Newswires

February 17, 2025 05:14 ET (10:14 GMT)

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