China’s largest search engine Baidu disclosed Wednesday its unaudited financial results for the third quarter of 2019, shifting to a loss from last year’s profit but beating analysts’ expectations.
The company booked RMB 28.1 billion (USD 3.93 billion) in total revenues in the third quarter of this year, up 7% quarter-on-quarter, but slightly lower than RMB 28.2 billion recorded in the same period in 2018. The consensus revenue estimate was USD 3.89 billion.
Herman Yu, CFO of Baidu, said that his company delivered a solid third quarter, in spite of the softening macro-environment, industry-specific policy changes, and self-directed healthcare initiative.
Online marketing revenues were RMB 20.4 billion, decreasing 9% year-over-year, while other revenues were RMB 7.6 billion, increasing 34% year-over-year, driven mainly by the strong growth in online video platform iQIYI membership, cloud services, and smart devices.
Baidu reported a net loss of RMB 6.4 billion (USD 892 million) in the third quarter of this year, compared to a net income of RMB 12.4 billion in the third quarter of 2018. This is the second quarterly loss since it went public in the United States in 2005. The company made a net loss of RMB 327 million (USD 49 million) in the first quarter of this year but booked RMB 2.4 billion in net income in the second quarter of this year.
The company mentioned that it booked RMB 9.5 billion in “total other loss” in the third quarter, mainly due to loss from equity investments that have experienced an other-than-temporary decline in valuation, in comparison to “total other income” of RMB 9 billion for the third quarter of 2018,
Baidu said that it recognized a non-cash accounting gain of RMB 24.4 billion in the fourth quarter of 2015, following a transaction where the company exchanged shares of its majority-owned subsidiary Qunar for a minority investment in Trip.com, formerly known as Ctrip. It added that the market value of Trip.com shares has declined and the continued low market price has caused the company to recognize a non-cash impairment loss of RMB 8.9 billion in the third quarter of 2019.
Baidu further disclosed that in October it had decreased its holding in Trip.com from approximately 19% of their outstanding shares to 12%.