Baidu Earnings Preview: Could The Company Outperform Expectations This Quarter?

We expect the company to report that growth was driven by a sharp increase in mobile revenues during the quarter. This was likely fueled by user growth on mobile search, as well as a rise in mobile monetization (which continues to be lower as compared to that on PC devices). At the same time, we expect that Baidu faced continued margin-related pressure in the second quarter, as its recent initiatives have led to an increase in both SG&A and R&D costs.