China’s Baidu Inc beat Wall Street estimates for quarterly revenue and adjusted profit on Wednesday, helped by stronger advertising sales and demand for its artificial intelligence and cloud products.
A recovering domestic economy encouraged higher marketing spending, helping Baidu’s ad sales, even as it faces tough competition from e-commerce giant Alibaba and ByteDance. Baidu’s foray into artificial intelligence (AI), cloud and autonomous driving has also helped its growth.
“Baidu Core delivered another solid quarter, powered by our AI cloud revenue growing 73% year-over-year,” said Rong Luo, chief financial officer of Baidu.
In a bid to expand its portfolio, the company last year introduced robotaxi services in Beijing and entered into a partnership with Chinese auto manufacturer Geely to develop electric vehicles, a fast-evolving sector where many tech companies are looking to make a mark.
Baidu expects current-quarter revenue to be between 31 billion yuan and 34 billion yuan, largely in line with analysts’ expectation of 32.60 billion yuan, according to Refinitiv IBES data.
Baidu’s streaming affiliate, iQIYI, which saw its subscribers reach to 104 million in September, also reported a 6% rise in revenue during the quarter.
The company’s results come amid a wide-ranging regulatory crackdown by China on its technology sector that includes heavyweights like Tencent and Alibaba in a bid to keep a check on their monopolistic practices.
Baidu’s total revenue was 31.92 billion yuan ($5.00 billion) in the third quarter, slightly above estimates of 31.71 billion yuan.
On an adjusted basis, the company earned 14.66 yuan per ADS, compared to Street’s estimates of 12.81 yuan per ADS.
U.S.-listed shares of the company, which have slumped 21% this year, were up 1.6% at $173.99 premarket.
($1 = 6.3811 Chinese yuan renminbi)