By Maria Armental
Chinese search engine giant Baidu Inc. swung to a third-quarter profit and returned to revenue growth, pointing to an advertising turnaround despite second coronavirus pandemic wave in China. Here's what you need to know:
PROFIT: Baidu swung to a profit of 13.68 billion yuan ($2.02 billion), or CNY39.79 ($5.86) an ADR, from a year-earlier loss of CNY6.37 billion yuan. On an adjusted basis, profit rose to CNY20.35 ($3) an American depositary receipt from CNY12.61 an ADR a year earlier. Analysts surveyed by FactSet expected a profit of CNY8.74 an ADR, or CNY13.17 an ADR as adjusted.
REVENUE: Total revenue rose to CNY28.23 billion ($4.16 billion) from CNY28.08 billion a year earlier. Baidu had projected CNY26.3 billion to CNY28.7 billion, with core revenue ranging from a 7% decline to a 3% increase, and analysts expected CNY27.52 billion.
IQIYI: Baidu reported CNY7.19 in revenue from iQiyi Inc., compared with CNY7.4 billion a year earlier. Analysts expected CNY7.19 billion, while iQiyi had projected CNY6.95 billion to CNY7.40 billion.
OUTLOOK: This quarter, Baidu projects CNY28.6 billion to CNY31.3 billion ($4.2 billion to $4.6 billion) in revenue, compared with analysts' CNY29.02 billion, which would mark a return to growth. Core revenue could range from a 1% decline to a 10% increase from the year-earlier period, Baidu said.
PANDEMIC: "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," Robin Li, co-founder and chief executive, said in a statement.
ACQUISITION: Baidu on Monday said it had reached an agreement to buy JOYY Inc.'s video-based entertainment live streaming business in China, which includes YY mobile app, YY.com website and PC YY, for about $3.6 billion in cash. The deal is expected to close in the first half of 2021. "This transaction will catapult Baidu into a leading platform for live streaming and diversify our revenue source." Mr. Li said in a statement, adding that "with the team from YY Live, Baidu hopes to explore the next-generation livestreaming and video-based social media that can expand beyond entertainment into the diversified verticals on Baidu platform."
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(END) Dow Jones Newswires