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Shanghai (AFP)
Baidu, the leading provider of Chinese Internet search services, has announced a 50% drop in net profit for the fourth quarter, but its revenue has exceeded expectations for the growth of its core research business and a push towards artificial intelligence.
The Beijing-based Nasdaq-listed company announced Thursday its fourth-quarter profit of 2.08 billion yuan ($ 303 million) for the October-December period.
Profits were affected by losses arising from minority interests in the Baidu iQiyi video unit, which had been split last year, and continued investment in new areas.
But total revenue for the quarter was higher than expected, at 27.2 billion yuan, exceeding badysts' estimates and Baidu's own forecast, and the company announced plans to stay the course.
"The diversification of Baidu's activities from the mobile Internet to the smart home, smart transport, cloud and standalone markets will require heavy investment," said Herman Yu, chief financial officer.
"Nevertheless, these investments together give Baidu a balanced portfolio for short, medium and long-term returns, and we hope to see these investments bear fruit and accelerate revenue growth for Baidu in the coming years."
For the full year, Baidu's profit rose 51 percent to 27.6 billion yuan, the company said.
Baidu, along with Alibaba and Tencent, form the troika called "BAT" of the Chinese giants of the Internet.
But if Alibaba and Tencent have remained in favor, Baidu has lost a little luster in the eyes of some badysts.
Considered as China's response to Google, China relies on a portion of its revenues for advertising, a sector particularly vulnerable to economic downturns like the one China is currently experiencing.
The Chinese economy grew by 6.6% in 2018, an badet for most countries but the slowest for China for almost three decades.
Baidu once again recorded solid growth in the number of daily active users for its main application and its other main offerings.
The company is seeking to reposition itself and no longer rely on the search engine sector to turn to technologies used in AI, for which the Chinese government wants the country to become a leader. .
Baidu, however, said it expects a slowdown in revenue growth in the first quarter of 2019.
The company's badysts said this would be due to the slowdown in the Chinese economy and to exceptional charges over the period.
© 2019 AFP
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