(Yicai Global) Aug. 14 -- Baidu posted revenue of CNY26.03 billion (USD3.8 billion) in the second quarter ended June 30, a 1 percent drop from the same time last year and revenue from its main business jumped 24 percent as the Covid-19 pandemic came to heel in China.

The company’s after-hours share price fell 5.4 percent from yesterday's close after the release of its earnings report, partly on news that the US Securities and Exchange Commission will probe its iQiyi unit.

The Beijing-based tech titan’s net profit attributable to shareholders was CNY3.6 billion, up 48 percent over the previous year. The total revenue of the Baidu Core, a combination of search and transaction services, was CNY18.9 billion in the second quarter, down 3 percent over a year earlier, but up 24 percent from the one before.

The results reflect Baidu’s relatively swift recovery from the pestilence, buoyed by internet traffic and artificial intelligence. Baidu projected revenues at between CNY26.3 billion and CNY28.7 billion in the third fiscal quarter, representing growth of -6 percent to 2 percent, which assumes that Baidu Core revenue will grow between -7 percent and 3 percent from a year earlier, the company said, emphasizing the uncertainty the epidemic has brought to its business.

Chairman and Chief Executive Officer Robin Li pointed to “in-app revenue [growth] in the second quarter, despite a challenging macro environment,” which “further validat[ed] our strategy to make Baidu App a super app through AI-powered building blocks and a marketing cloud platform."

Revenue from Netflix-like video service website iQiyi was CNY7.4 billion in the second quarter, an increase of 4 percent from last year. Although iQiyi’s membership service rose 19 percent, its online advertising revenue fell 28 percent from the previous year.

"Baidu's new AI businesses, including cloud, smart devices and smart transportation, saw double-digit growth in the second quarter and stand to become an important revenue driver in the years to come," Li added.

The share price of iQiyi [NASDAQ:IQ], in which Baidu holds a 69.6 percent stake, fell as much as 21.7 percent to USD17.82 after the market closed.

“The SEC's Division of Enforcement is seeking the production of certain financial and operating records dating from Jan. 1, 2018, as well as documents related to certain acquisitions and investments that were identified in a report issued by short-seller Wolfpack Research in April 2020,” iQiyi said in the second-quarter report it released today, adding the timing, outcome or consequences of this probe are uncertain.

Editor: Ben Armour