Shares of Chinese internet giant Baidu surged over 4% in after-hours trade following better-than-expected results for the third quarter.
Here are the highlights for the three months ended September 30:
- Revenue of 28.08 billion yuan ($3.93 billion, according to the earnings release exchange rate). That’s was relatively flat year-on-year.
- Excluding items, earnings per share came in at 12.61 yuan, beating market expectations, but representing 34% year-on-year decline.
Analysts polled by Refinitiv had expected 27.49 billion yuan in revenue and adjusted earnings per share of 7.88 yuan.
Baidu has faced a number of headwinds this year including a slowing Chinese economy amid a protracted U.S.-China trade war, increased competition from new search players like TikTok owner ByteDance and increased scrutiny from regulators on the advertising market in the world’s second-largest economy.
Shares of Baidu have fallen 32% this year.
But the Chinese firm has been looking to diversify revenues, and reduce reliance on its core search business, by expanding into areas like driverless cars, artificial intelligence and streaming. The first two are viewed as future growth areas for the company, but its video platform iQiyi is already delivering the goods.
Revenue from iQiyi reached 7.4 billion yuan ($1.04 billion), up 7% year over year, while subscribers jumped 31%. iQiyi, which is listed separately in the U.S., but majority-owned by Baidu, saw its shares jump over 4%.
Meanwhile, Baidu has also been trying to boost its mobile offering. The search giant has been criticized in the past for its slow shift to mobile as consumers spend an increasing amount of time on so-called super apps. These are products like Tencent’s WeChat or Ant Financial’s Alipay where a user can do a number of different things — ranging from payments to ordering food — all within one app.
Baidu’s own app which combines search, news and videos with the aim of increasing user engagement, saw daily active users reach 189 million, up 25% year-on-year in September.
The company’s core business also remained resilient, a positive sign for investors.
“Our focus to combine search and feed and expand Baidu App’s content and services offerings is improving user experience and drawing publishers and service providers to place more content and services on Baidu’s hosted platform, which in turn draws more users,” Robin Li, chairman CEO of Baidu, said in a statement.