China’s largest search engine disclosed on Tuesday (Beijing time) that it booked RMB 2.4 billion (USD 351 million) in net income in the second quarter of this year, down 62% year-on-year from RMB 6.4 billion for the same period in 2018.
However, it is still a reversal of Baidu’s financial performance as it made its first-ever net loss in the first quarter of the year since going public in 2005. That loss led to the shrinking of the company’s market capitalization, falling below that of NetEase and causing Baidu to tumble out of the top-five of China’s publicly-traded internet companies.
Baidu collected RMB 26.3 billion in total revenue for the second quarter, up 1% year-on-year. That is close to the higher end of the revenue guidance range between RMB 25.2 billion and RMB 26.6 billion, which was provided by the company’s management along with the release of the Q1 earnings.
Revenue from Baidu’s core business reached RMB 19.5 billion, decreasing 2% year-on-year but increasing 12% quarter-on-quarter.
Revenue from video streaming site iQiyi hit RMB 7.1 billion, a rise of 15% year-on-year and accounted for 27% of the company’s entire revenue.
Baidu said in the press release for its second-quarter earnings that it expects revenue for the third quarter to be between RMB 26.9 billion (USD 3.84 billion) and RMB 28.5 billion (USD 4.07 billion). This revenue spread would either be at worst a 5% decrease year-on-year or at best a 5% increase year-on-year.
“As you can see, there are more and more positive signs emerging as our business begins to stabilize and pick up. This goes to show that Baidu remains strong and vigorous in our core business,” said founder and CEO Robin Li in a letter to employees after the earnings announcement, a translation of which was shared with KrASIA on Tuesday.
“In recent months, faced with severe external challenges and a weak macro environment, the company initiated a series of transformative changes, including organizational structure, personnel, and business consolidation. These changes have brought temporary pain, but the positive impact will be far-reaching, enabling a more solid and long-lasting future for Baidu,” he added.
Nasdaq listed Baidu closed at 104.22, up 7.78% Monday (US time) even before the earnings announcement. It has advanced 8.6% to USD 113.18 in the pre-market trading on Tuesday so that it is above NetEase in market capitalization.