Baidu Inc., one of China’s leading internet companies, reported mixed results for the third quarter of 2024. The company’s shares dropped 5.5% in morning trading on Thursday following the earnings release. Baidu’s adjusted profits per American depositary share fell 19% year-over-year to 16.60 yuan ($2.37).
Total sales declined by 3%, amounting to 33.56 billion renminbi ($4.78 billion). Robin Li, co-founder and CEO of Baidu Core, the company’s primary division, cited ongoing challenges in online marketing as the main reason for the tepid performance. However, he noted that gains in the AI Cloud business partially offset these issues.
Revenue from Baidu’s internet marketing segment declined 4% year-over-year to 18.8 billion renminbi ($2.68 billion).
Baidu’s mixed results impact shares
In contrast, non-online marketing revenue, primarily driven by the artificial intelligence cloud industry, increased 12% year-over-year to 7.7 billion renminbi ($1.10 billion).
Baidu Core’s overall income remained stable at 26.52 billion RMB ($3.78 billion). Baidu’s autonomous ride-hailing service grew, recording 998,000 trips throughout the quarter, a 20% increase from the previous year. The company also expanded the use of its sixth-generation driverless car, the RT6, on public roads in some Chinese cities.
The Baidu App experienced a 4% increase in monthly active users, reaching 704 million in September compared to last year. However, Baidu’s majority-owned online entertainment company, iQIYI, reported a 10% year-over-year sales drop to 7.2 billion renminbi ($1.03 billion), causing iQIYI’s shares to fall 4% in premarket trade. During the third quarter, Baidu repurchased $161 million worth of shares, bringing the total buybacks under its 2023 program to $1.4 billion.
The competitive landscape in China’s cloud services industry remains intense, with companies like Baidu, Alibaba, ByteDance, Tencent Holdings Limited, and iFlytek reducing rates for big language models earlier this year to attract clients.
