Baidu results beat expectations on strong video streaming growth

Baidu Inc. beat analysts' estimates for its third quarter profit and revenue it was announced on Wednesday, helped by strong growth at its video streaming platform iQIYI. This sent the Chinese search giant's shares up five percent in after hours trading.

Baidu has been trying to cut its dependence on its core search business and expand into other areas such as artificial intelligence and cloud services, but most of its success so far has been at iQIYI.

Revenue from iQIYI, which competes with Alibaba-backed Youku and Tencent Holdings' Tencent Video, rose nearly seven percent to 7.4 billion yuan (1.06 billion U.S. dollars), as the service grew to 105.8 million subscribers in September this year.

iQIYI's shares were also up four percent in extended trading.

The iQIYI innovation building in Beijing. /VCG Photo

The iQIYI innovation building in Beijing. /VCG Photo

Baidu's total costs and expenses jumped more than eight percent to 25.73 billion yuan during the quarter, while content costs rose 4.5 percent.

Revenue from the company's online marketing services arm, which includes search, news feeds and a video app and is a major contributor to overall sales, fell about nine percent to 20.43 billion yuan.

Baidu, whose search engine dominates the market in China, forecasts fourth quarter revenue to come between 27.1 billion yuan and 28.7 billion yuan, while analysts expect 27.52 billion yuan, according to analysis firm Refinitiv.

Net loss attributable to the company was 6.37 billion yuan in the third quarter ending September 30.

Total revenue fell marginally to 28.08 billion yuan from 28.2 billion yuan. Analysts on average had expected 27.49 billion yuan.

The company's U.S.-listed shares, which have fallen more than 32% this year, were up about 5% at $112.74 in extended trading.

Source(s): Reuters