(Yicai Global) Nov. 17 -- Chinese technology company Baidu exceeded Wall Street's expectations by swinging into profitability in the third quarter in the midst of diversifying its revenue streams.
Baidu's net profit was CNY13.7 billion (USD2.1 billion) in the three months ended September, compared with a loss of CNY6.4 billion a year ago, the Beijing-based firm said in its earnings report published today after the US market closed. Its revenue climbed by 1 percent to CNY28.2 billion (USD4.2 billion).
The search engine giant made a cautious prediction for the fourth quarter. Total revenue could fall by 1 percent or rise by 8 percent to a point between CNY28.6 billion and CNY31.3 billion, it suggested.
Nineteen Wall Street analysts had expected Baidu's third-quarter revenue to reach USD4.14 billion, slightly less than the reported figure, according to data compiled by Yahoo Finance.
Baidu’s non-GAAP diluted earnings per each American depositary share was CNY20.35 (USD3), higher than the predicted USD2.05.
“Our revenue growth turned positive in the third quarter with many advertising verticals turning around, putting Baidu in a good position to further benefit from a recovery in the Chinese economy," said Robin Li, co-founder and chief executive.
Online advertising still made up the largest portion of the total revenue at CNY18.4 billion but the firm is looking to diversify into emerging technologies.
"The vibrant mobile ecosystem that Baidu has built in the last few years sets a strong foundation for us to grow our non-advertising business,” Li said, adding that the company's artificial intelligence and cloud computing business was expanding.
Baidu’s core adjusted earnings before interest, taxes, depreciation, and amortization margin, a measure of profit in comparison to revenue, reached 46 percent, mainly due to its focus on open mobile platforms and AI, said Chief Financial Officer Herman Yu.
Baidu application’s number of daily active users reached 206 million in September. The platform accommodated nearly three times as many mini-programs as a year ago. Moreover, the number of content creators on Baijiahao, a we-media platform, rose by more than half to 3.6 million.
The company is making inroads into unmanned driving technologies. Baidu won a nearly CNY460 million (USD69.9 million) project bid in southern Guangzhou in August, which could become the country's largest smart transportation project this year. Last month, Baidu added Beijing as the firm's third city for its robotaxi service Apollo Go after obtaining the country's first fully driverless test license in central China's Changsha in September.
Baidu's stock price [Nasdaq: BIDU] finished 1.9 percent up at USD147.84 yesterday.
Editor: Emmi Laine