Baidu Reports 62% Profit Drop

By Maria Armental 

China's economic downturn and tighter control over internet content drove search-engine giant Baidu Inc.'s weakest quarterly revenue growth in more than two years and a 62% profit drop.

Still, results for the latest quarter beat Wall Street targets, sending shares up more than 9% to $114.04 in after-hours trading.

Baidu, which has been trying to diversify from its core search-engine business, projected another difficult quarter with about 26.9 billion yuan to 28.5 billion yuan in revenue ($3.84 billion to $4.07 billion). That would equate to a decline of up to 5% to an increase of 1% at best, the company said, missing analysts' projected 28.13 billion yuan, according to FactSet.

Second-quarter profit dropped to 2.41 billion yuan or 6.57 yuan an American depositary receipt, largely tied to video-streaming service iQiyi. Excluding stock-based compensation and other items, profit fell to 10.11 yuan an ADR from 21.06 yuan an ADR a year earlier.

Analysts expected 3.40 yuan an ADR, or 6.18 yuan on an adjusted basis, according to FactSet data.

Revenue revenue rose 1.4% to 26.33 billion yuan beating analysts' projected 25.8 billion yuan.

Baidu had forecast 25.1 billion yuan to 26.6 billion yuan.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

August 19, 2019 17:24 ET (21:24 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.