Friday, July 24, 2009

Analyst reaction: RBC Color on qtr (332.64)

RBC notes although BIDU's 3Q09 guidance
(reported last night after the close)
was shy of the highest expectations, firm
notes that 15-18% sequential growth
is still very impressive all things considered.
The high-end of guidance is in-line with firm's
est, and it will move consensus ests higher. If
there was one blemish on the reported qtr, it
is the continued increase in TAC payments
as traffic from the Union continues to outgrow
that of Baidu O&O. Mgmt noted the absence of
the summer Olympics as a factor in the
improvement in sequential growth vs. the prior yr,
though RBC believes the stabilization in the macro
environment is also helping Baidu return to more
normal seasonal growth trends seen in years prior
to 2008. 2Q09 was yet another uneventful qtr
with no thesis-changing data points, and as such
maintains Outperform rating. Tgt rasied to $339
from $331.

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