Baidu’s revenue forecast disappoints as US-listed shares tumble 12 per cent
Chinese search engine giant Baidu forecast December quarter revenue that fell short of analysts’ estimates as the company ramps up investments in artificial intelligence and autonomous driving technologies.
The company’s US-listed shares fell nearly 12 per cent to US$230 in extended trading on Thursday.
Baidu said it expects revenue between 22.23 billion yuan (US$3.34 billion) to 23.41 billion yuan (US$3.52 billion) for its fourth quarter, below analysts’ average estimate of 24.78 billion yuan, according to Thomson Reuters I/B/E/S.
Baidu’s quarterly profit more than doubled compared to a year earlier, helped by the search engine giant’s spending control on traffic acquisition costs.
Net income attributable to Baidu rose to 7.95 billion yuan (US$1.20 billion) in the third quarter ended September 30 from 3.10 billion yuan, a year earlier. Baidu’s total revenue rose to 23.49 billion yuan from 18.25 billion yuan.
Baidu, part of China’s trinity of tech giants along with Alibaba Group Holding Ltd and Tencent Holdings Ltd, is looking to turn around its fortunes after a series of missteps sparked steep losses in 2016.
The company has shifted funding to focus on artificial intelligence and autonomous driving – industries where it has a rare edge against Alibaba and Tencent.
Baidu has overhauled itself after a scandal over dodgy health care adverts last year triggered a regulatory crackdown on online promotion, battering the company’s key ads business.