Analyst take on Q1 08 - Citi

Citigroup analyst Jason Brueschke says Baidu's
$81.9 million first quarter revenue and $0.67
EPADS topped his and Street estimates; as did
$111-$114 million second quarter revenue guidance.

He notes the company benefited in the first
quarter from conservative guidance, effects of
an early Chinese New Year, and the bringing of
key sales regions in-house. He says, equally
important, was although BIDU guided to 2008 profit
and loss impact of $20-$25 million for Japan, plus
$5-$7 million (his estimate) spending on consumer
to consumer e-commerce, only $4.3 million was spent
in the first quarter 2008 -- far below implied
pro-rata spending. He expects BIDU will continue to
under-spend, further cushioning earnings in 2008.

Brueschke raises $3.80 2008 EPADS estimate to $4.07,
$6.82 2009 EPS to $6.87 and $350 price target to $415.
Jason Brueschke upgrades Baidu shares to "Buy"
from "Hold" on the Q1 results, and lifts his price
target to $415 per share from $350. Says Baidu
is doing a good job of keeping costs down.