Baidu Stock Soars 9% on Better-than-expected Results in Third Quarter
While revenue from Baidu Core declined year-over-year, the results in other sectors improved, leaving Wall Street impressed.
The stock in Baidu Inc. (Nasdaq: BIDU) soared nearly 9% in early trading Thursday, to $116.80 per American depositary share after the company released its results for the third quarter.
In a statement posted after markets closed Wednesday, Baidu said its revenue in the three months through September was $3.9 billion, flat year-over-year but up 7% from the preceding quarter.
Net loss attributable to Baidu was $892 million, or per ADS loss of $2.57. Losses reflected a non-cash impairment loss of $1.2 billion on equity investments that has declined in valuation, according to the report. Baidu said the losses were related to its disposal of shares in Trip.com (Nasdaq: CTRP) as it shifted its business focus.
"In October 2019, the Company sold down the holding in Trip.com, which decreased from approximately 19% of their outstanding shares to 12% of the Trip.com's outstanding shares," Baidu stated.
Baidu operates China's top search engine and provides internet-related services and products, as well as artificial intelligence-powered technology development.
There are two points worth noting in the financial statements. Revenue from Baidu Core, a combination of search and trading services, was $2.94 billion, down 3% from the same period last year and up 8% from the previous quarter. Its affiliate, iQiyi Inc. (Nasdaq: IQ), also posted strong performance for the third quarter, with subscribers reaching 105.8 million, up 31% year-over-year. Revenue from iQiyi was at $1.04 billion, up 7% from a year ago.
Baidu App traffic continued to grow during the September quarter, with the number of daily active users (DAUs) reaching 189 million, up 25% year over year. Baidu's AI businesses, DuerOS voice assistant, continues to experience strong momentum with monthly voice queries surpassing 4.2 billion in September, up over 4.5-fold year over year.
In addition, Baidu's Apollo kickstarted China's first robotaxi pilot program, made available to the public in Changsha, Hunan province, with an initial fleet of 45 autonomous driving vehicles.
Baidu chairman and CEO Robin Li and CFO Herman Yu both emphasized the important impact of AI technology and search and feed on Baidu's revenue and development.