China’s search engine giant Baidu Inc on Thursday forecast third-quarter revenue marginally below Wall Street estimates and warned of low visibility in business due to uncertainty from the coronavirus crisis.
U.S.-listed shares of the company fell 5.5% in extended trading as investors looked past Baidu’s second-quarter profit and revenue beat.
The company expects current quarter revenue in the range of 26.3 billion yuan to 28.7 billion yuan, the midpoint of which is slightly below the average analyst estimate of 27.57 billion yuan, according to IBES data from Refinitiv.
Baidu’s revenue from advertising still remains under pressure as big businesses in industries such as travel and financial services continue to pull back on ad spending.
Revenue from the company’s online marketing services, which includes search, news feeds and video apps and is a major contributor to overall sales, fell 8% to 17.7 billion yuan in the second quarter ended June 30.
Membership revenue in Baidu’s Netflix-like streaming service, iQIYI, however, jumped 19%, arresting the total revenue decline to 1%.
Total revenue fell to 26.03 billion yuan ($3.75 billion), edging past analysts’ estimates of 25.71 billion yuan.
On an adjusted basis, Baidu earned 10.11 yuan per American depository share (ADS), above expectation of 9.60 yuan per ADS.