ReutersNov 07, 2019 08:24:55 IST
Baidu Inc beat analysts' estimates for quarterly profit and revenue on Wednesday, helped by strong growth at its video streaming platform iQIYI, sending the Chinese search engine giant's shares up 5 percent after market.
The company has been trying to cut its dependence on the core search business and expand into other areas such as cloud services and artificial intelligence, but most of its success so far has been at video streaming service iQIYI Inc .
Revenue from iQIYI, which competes with Alibaba-backed Youku and Tencent Holdings' Tencent Video, rose nearly 7 percent to 7.4 billion yuan ($1.06 billion), as the service crossed 105.8 million subscribers in September this year.
IQIYI's shares were also up 4 percent in extended trading.
The results come as Baidu battles a slowing Chinese economy against the backdrop of the country's protracted trade war with the United States, tighter ad regulations and rising competition from rivals like ByteDance's TikTok.
Alibaba Group Holding Ltd last week also topped profit and revenue expectations, showing how diversification strategies at some tech giants might be helping deflect macroeconomic pressures.
The diversification has come at a price. Baidu's total costs and expenses jumped more than 8 percent to 25.73 billion yuan during the quarter, while content costs rose 4.5 percent.
Revenue from the company's online marketing services business, which includes search, news feeds and a video app and is a major contributor to overall sales, fell about 9 percent to 20.43 billion yuan.
Baidu, whose search engine dominates the market in China, forecast fourth-quarter revenue between 27.10 billion yuan and 28.70 billion yuan, while analysts had expected 27.52 billion yuan, according to IBES data from Refinitiv.
Net loss attributable to the company was 6.37 billion yuan in the third quarter ended 30 September, compared with a net income of 12.40 billion yuan a year earlier.
Excluding items, the company earned 12.61 yuan per American depository share (ADS), beating estimates of 7.88 yuan per ADS.
Total revenue fell marginally to 28.08 billion yuan from 28.20 billion yuan. Analysts on average had expected 27.49 billion yuan.
The company's US-listed shares, which have fallen more than 32 percent this year, were up about 5 percent at $112.74 in extended trading.