After reporting mixed third-quarter results, Baidu (BIDU, Financials) shares dipped 5.5% in Thursday's morning trading, with online marketing revenue falling but cloud revenue rising.
Missing analysts' forecasts, Baidu's adjusted profits per American depositary share dropped 19% year-over-year to 16.60 yuan ($2.37). Equally distressing, though it surpassed projections, total sales dropped 3% year over year to 33.56 billion renminbi ($4.78 billion).
Robin Li, co-founder and CEO of Baidu Core, the company's primary division, blamed continuous flaws in online marketing for the flat performance of that section, somewhat offset by the expansion of the AI Cloud business. According to Baidu, 1.5 billion daily API requests in November 2024—up from 600 million in August—were handled by its AI model ERNIE.
Revenue from Baidu's internet marketing declined 4% year over year to 18.8 billion renminbi ($2.68 billion). Driven mostly by the artificial intelligence cloud industry, non-online marketing revenue climbed 12% year over year to 7.7 billion renminbi ($1.10 billion). The whole income of Baidu Core remained steady at 26.52 billion RMB ($3.78 billion).
With 998,000 trips throughout the quarter—a 20% rise from last year—the company's autonomous ride-hailing service In some Chinese cities, Baidu also extended the running of its sixth-generation driverless car, the RT6, on public roads.
September's monthly active users of the Baidu App came out to be 704 million, a 4% rise over the same time previous year.
By contrast, majority-owned online entertainment company iQIYI (IQ, Financials) reported a 10% year-over-year sales drop to 7.2 billion renminbi ($1.03 billion). After its results, iQIYI's shares dropped 4% in premarket trade.
Since the beginning of the third quarter, Baidu has bought back $161 million worth of shares; so, under its 2023 repurchase program, total buybacks come to $1.4 billion.
With companies like Baidu, Alibaba (BABA, Financials), ByteDance, Tencent Holdings Limited (TCEHY, Financials), and iFlytek reducing rates for big language models early this year to attract clients, China's cloud services industry remains competitive.
