Chinese search engine giant Baidu beat its quarterly revenue estimates on Thursday as the resurgence of COVID-19 in China and accompanying restrictions fueled demand for its cloud and artificial intelligence (AI) products.
The news sent US-listed Baidu shares up more than 5 percent in pre-market trading even as the company warned that the second quarter would be more difficult.
Revenue for the three months to March 31 rose 1% to CNY 28.41 billion (~ Rs 32,748 crore), the slowest growth in six quarters, but beat analysts’ average estimate of CNY 27.82 billion (~ Rs 32,076 crore), IBES Data from Refinitiv showed.
It posted a net loss of CNY 885 million (about Rs 1,020 crore), or CNY 2.87 (approximately Rs 33) per US Depository Share (ADS), amid the economic slowdown and the resurgence of epidemics in China.
In the previous year, it posted a profit of CNY 25.65 billion (~Rs 29,563 crore), or CNY 73.76 (~ Rs 850) per ad.
“Since mid-March, our business has been negatively impacted by the resurgence of COVID-19 in China,” Baidu founder and CEO Robin Li said in a statement, adding that challenges related to the virus will continue to pressure its operations. in the near term.
Baidu Core’s revenue, which includes online advertising sales and non-advertising sales of its AI-powered products including AI cloud, rose 4 per cent to CNY 20.48 billion (about Rs 23,615 crore).
Online advertising revenue fell 4 percent year-on-year to CNY 15.7 billion (about Rs 18,095 crore).
Baidu’s chief financial officer, Lu Rong, said during a conference call that the second quarter will be more difficult for the company, compared to the first.
Sales from the Baidu AI cloud, part of non-advertising revenue and one of the fastest-growing segments, jumped 45 percent, according to Lu.
Founded as a search engine tool, the company has expanded to include cloud services, autonomous driving, and a bot hub in recent years as competition for the core search platform and advertising business has increased.
Last month, Baidu obtained permits to deploy humanless robots in the driver’s seat on open Chinese roads for the first time.
Apollo Go, Baidu’s robotaxy service, which is currently available in 10 Chinese cities, operated approximately 196,000 flights during the quarter.
© Thomson Reuters 2022