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Baidu Inc. (BIDU) shares traded lower Friday after the China-focused search engine operator posted stronger-than-expected fourth quarter earnings and held to its near-term revenue guidance despite the broader slowdown in the world's second-largest economy.

Baidu said adjusted earnings for the three months ending in December were tabbed at 13.18 yuan per share ($1.96), based on its American depositary share listing, well ahead of the 11.83 estimate compiled by Refinitiv. Group sales also topped the Street forecast, rising 22% to 27.2 billion yuan, most of which (21.5 billion yuan) came from its online marketing business, which includes search and news feeds.

Looking into 2019, Baidu said it sees first quarter revenues in the region of 23.5 billion to 24.7 billion, an 18% increase at the top end and a figure that won't be affected by company divestments and essentially matches Street forecasts.

"2018 was a pivotal year for Baidu, as we worked on deploying AI technologies beyond search to feed, voice assistant, AI solutions and autonomous driving, to enable more users, customers and partners to benefit from Baidu's AI," said CEO Robin Li.

Baidu's U.S.-listed shares were marked 2.5% lower at $167.45 each in early Friday trading,  a move that would extend the stock's three-month decline to around 6%. It's main China rivals, Alibaba Holding Co. (BABA) , and Tencent Holdings (TCEHY) have risen around 15% and 15.8% respectively over the same time period.

Alibaba's online streaming services, Youku, as well as Tencent's offering, are Baidu's biggest competitors in the massive Chinese market for digital entertainment.

Baidu said its streaming division, known as iQIYI, added 36.6 million subscribers last year to bring its total to 87.4 million, just over half the size of Netflix's (NFLX) 146.5 million. Baba said its Youku additions rose 64% over the December quarter while Tencent's grew 23% over the thee months ending in October to 154 million.

iQiyi revenues rose 55% over the December quarter, Baidu said, to 7 billion yuan, but, like Netflix, the cost of buying content to its users surged to 7.3 billion yuan, up 96% from the same period last year. Bandwidth costs were also higher, rising 27% to 1.8 billion yuan, with the collective figures eating into Baidu's overall bottom line.