Baidu’s Silence: Shortfall Ahead? 百度低调发财报：或开始下坡路？

By newsdoug on January 30, 2012

I certainly don’t think of myself as a believer in conspiracy theories, but I have to say I was a bit surprised to read several reports over the weekend saying that leading search site Baidu (Nasdaq: BIDU) was going to report its fourth quarter results on Monday US time and can’t help but wonder if there’s a bigger story here. (English article; Chinese article) Let’s backtrack a bit and review what exactly happened, or in this case what didn’t happen. Most importantly, Baidu has made no public announcement of its plan to release its latest earnings, even though numerous websites have clearly learned of its intent based on all the reports. The company usually puts out an announcement via PRNewswire around 3 weeks ahead of its earnings date, which is notably absent this time on both the PRNewswire site and Baidu’s own investor relations site. What’s more, the date isn’t even marked on Baidu’s own investor relations calendar, even though quarterly reports are clearly one of the most important events for publicly listed companies, especially ones like Baidu whose revenue and profits keep growing by very attractive rates even as companies in other sectors stumble. This time is no different, with analysts looking for Baidu’s top and bottom lines to grow by more than 80 percent. The timing of this announcement also looks a little odd, as it comes on the first day of the new work week after most of China took off the previous week for the Lunar New Year holiday. The last time someone tried to do something like that was last fall, when B2B e-commerce leader Alibaba.com (HKEx: 1688), which is listed in Hong Kong, quietly announced its less-than-stellar results on the US Thanksgiving Day holiday when many people had just started a 4-day vacation. (previous post) Of course I should also point out that Baidu released its fourth-quarter results at just about the same time last year, and the odd timing could just owe to the fact that the Lunar New Year fell quite early this year. It’s also possible that Baidu simply just forgot to send out a notice about its latest reporting date, and also forgot to include it on its investor relations calendar. In fact, one research house said it talked recently to Baidu management, which was confident of meeting expectations for its results. Still, I can’t help but wonder if we’ll perhaps see the beginning of the slowdown for this company that I predicted around the middle of last year (previous post) and seems all but inevitable, if not now then later this year.

Bottom line: Baidu’s low-profile approach to its latest earnings due out on Monday US time could signal a downside surprise, as its booming ad sales finally start to slow.

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