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Shares of Baidu Inc. (BIDU) rose Friday in pre-market trading after China-based search engine operator reported higher-than-expected earnings in the fourth quarter and remained consistent with its short-term revenue forecast, despite the more general slowdown of the second-largest economy.
Baidu said the adjusted profit for the three months ending in December was 13.18 yuan per share ($ 1.96), based on the US depository's stock list, well before the estimate of 11.83 established by Refinitiv. Group sales also outpaced Street's forecast, up 22 percent to 27.2 billion yuan, most of which (21.5 billion yuan) came from its online marketing business, which includes search and news feeds.
As of 2019, Baidu announced revenue of $ 23.5 billion to $ 24.7 billion for the first quarter, an increase of 18% at the top and a figure that will not be affected by corporate divestments and matches essentially to Street forecasts.
"2018 has been a pivotal year for Baidu because we have deployed artificial intelligence technologies going beyond the search for food, voice assistant, solutions for the future. Artificial intelligence and autonomous driving, to allow more users, customers and partners to benefit from Baidu's artificial intelligence, "said general manager Robin Li.
Baidu's publicly traded US stocks were up 2.7% on Friday, indicating a sell-off price of $ 176.45 each, which would reduce the stock's pullback to about 4%. Its main Chinese rivals, Alibaba Holding Co. (BABA) and Tencent Holdings (TCEHY) grew by 15% and 15.8% respectively over the same period.
Alibaba's online streaming services, Youku, as well as Tencent's offering, are Baidu's main competitors in China's vast digital entertainment market.
Baidu said its streaming division, known as iQIYI, added 36.6 million subscribers last year to bring its number to 87.4 million, just over half of the total. 146.5 million Netflix (NFLX) size. Baba said his additions to Youku had increased 64 percent from December, while those in Tencent had increased 23 percent over the three months to 154 million.
IQiyi's revenues rose 55% over December, Baidu said, to 7 billion yuan, but like Netflix, the cost of buying content for its users has soared to 7 , 3 billion yuan, up 96% over the same period last year. Bandwidth costs also increased, reaching 1.8 billion yuan, up 27 percent, as collective figures weigh more and more in Baidu's net income.
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