Shares of Baidu Inc. (NAS:BIDU) slipped 0.8% in premarket trading Thursday, after the China-based internet search engine reported second-quarter profit and revenue that beat expectations, driven by strength in the artificial intelligence business, but provided revenue growth outlooks in which the midpoint of guidance was below forecasts. The company swung to a net loss of RMB583 million ($90 million), or RMB1.70 a share, from net income of RMB3.58 billion, or RMB10.31 a share, in the year-ago period. Excluding nonrecurring items, such as a RMB3.1 billion fair value losses from long-term investments, adjusted earnings per share came to RMB15.41, above the FactSet consensus of RMB13.09. Total revenue rose 20% to RMB31.35 billion ($4.86 billion), topping the FactSet consensus of RMB30.99 billion, as AI cloud revenue grew 71%. Online marketing revenue rose 18%, non-online marketing revenue increased 80% and revenue from iQIYI grew 3%. The company expects third-quarter revenue of RMB30.6 billion to RMB33.5 billion and full-year growth of 9% to 20%, while the FactSet consensus for third-quarter revenue is RMB33.11 billion and for the full year is RMB127.55 billion, which represents 19% growth. Separately, the company said Herman Yu was named Chief Strategy Officer, and will continue as chief financial officer until a new CFO is named. The stock has dropped 23.7% year to date through Wednesday, while the iShares MSCI China ETF (NAS:MCHI) has shed 10.2% and the S&P 500 (S&P:SPX) has gained 18.4%.
Aug. 12, 2021, 6:20 a.m. EDT