Revenue for the three months ended June rose 20% from a year earlier to 31.35 billion yuan ($4.86 billion), lifted by a rebound in advertising sales in its internet search business and higher demand for its artificial intelligence and cloud products.
That compared to analysts' estimates of 30.9 billion yuan. Baidu predicted sales of between 30.6 billion yuan and 33.5 billion yuan for the September quarter vs. 33.1 billion yuan estimated by analysts.
“The COVID-19 situation in China is evolving and business visibility is limited,” Baidu said in a statement Thursday. Baidu swung to a net loss of 583 million yuan in the second quarter, after marking down the value of its stake in Kuaishou Technology.
In U.S. dollars, Baidu reported a net loss of $90 million, or 26 cents a share. Adjusted earnings were $830 million, or $2.39 a share, up 5% from a year ago. Analysts polled by FactSet were expecting earnings of $2.03 a share.
While Robin Li’s 21-year-old firm has largely escaped Beijing’s recent crackdown on big tech, a harsher-than-expected ban on for-profit after-school tutoring is likely cripple the spending power of some of Baidu’s key ad clients, according to analysts.
Near term, Baidu is still counting on search and other content offerings like live-streams and web shows to fuel its advertising platform, which contributed roughly 64% of sales for the first quarter.
However, Baidu’s Netflix-style service, iQiyi (IQ) - Get iQIYI, Inc. Sponsored ADR Class A Report, could face tighter scrutiny after state media criticized platform operators for hyping up celebrity fan culture, according to analysts.
At last check, Baidu's American depositary receipts were down 4.42% at $157.66. Year to date they are down 27.28%.