=Baidu (BIDU) reported earnings on Thur 16 May 2019 (a/h)

Baidu misses by $0.10, reports revs in-line; guides Q2 revs below consensus; announces $1 bln buyback program

• Reports Q1 (Mar) earnings of $0.41 per share, excluding non-recurring items, $0.10 worse than the S&P Capital IQ Consensus of $0.51; revenue +15% to $3.59 bln vs. $3.59 bln consensus, or 21% year over year excluding the impact of announced divestitures. Online marketing revenues were RMB17.7 billion ($2.63 billion), increasing 3% year over year, which was mainly due to strength in education, retail, and business services, while healthcare, online games services, and financial services sectors were less vibrant. Other revenues were RMB 6.5 billion ($963 million), increasing 73% year over year, which was mainly due to the robust growth in iQIYI membership services, cloud and other businesses. Revenue from Baidu Core reached RMB 17.5 billion ($2.60 billion), increasing 8% year over year, or 16% year over year excluding the impact of announced divestures, while revenue from iQIYI reached RMB 7.0 billion ($1.04 billion), increasing 43% year over year. Content costs were RMB 6.2 billion ($917 million), increasing 47% year over year, mainly due to increased investments in iQIYI content and, to a lesser extent, in content for BJH accounts, Baidu feeds' content network. Traffic acquisition cost was RMB 3.2 billion ($474 million), increasing 41% year over year
• Co issues downside guidance for Q2, sees Q2 revs -3% to +2% to $3.74-3.96 bln vs. $4.34 bln S&P Capital IQ Consensus (+1-6% ex-divestitures). 
• "In March, Baidu's mobile reach expanded to 1.1 billion monthly active devices, while DuerOS voice assistant installed base reached 275 million devices and generated 2.37 billion monthly voice queries. We are leveraging Baidu AI to provide enterprise solutions to businesses and local governments, which significantly expands our total addressable market," said Robin Li, Chairman and CEO of Baidu. "Looking ahead, we are quite excited about the opportunities to significantly improve content and service discovery through in-app search and increase customer ROI with our entrance into CRM, to deepen our offering to our marketing customers... margins were dampened by our successful CCTV New Year Eve Gala marketing campaign, which accelerated the traffic of Baidu family of apps and highlighted better in-app search user experience." said Herman Yu, CFO of Baidu. "Despite government policies to improve the market condition for SMEs, we anticipate online marketing in the near term to face a challenging environment. We will take this opportunity to improve our monetization capabilities and review our businesses for operational efficiency, while recognizing the importance to invest for sustainable long-term growth." 
• Board of directors authorized a new share repurchase program under which the Company may repurchase up to US$1 billion of its shares, effective until July 1, 2020.