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Baidu’s revenue beats estimates in defiance of slowing economy
[HONG KONG] Baidu reported quarterly revenue that beat analysts' estimates after the Chinese search giant's business proved resilient to an economic slowdown and competition from ByteDance Inc.
Third-quarter revenue came in at 28.08 billion yuan (S$5.44 billion). That was down slightly from a year earlier, but exceeded the 27.53 billion yuan average analyst projection, according to data compiled by Bloomberg. The shares jumped about 5 per cent in extended trading, after closing at US$107.36 in New York earlier on Wednesday.
The results may assuage investors who are worried that the 19-year-old company is losing advertising sales to upstart ByteDance, which offers lower rates and more than 1 billion users on popular apps such as TikTok and Douyin.
ByteDance has also recently entered the online search business, Baidu's main product. To offset a slowdown, Baidu has reduced spending.
Baidu is making "efforts to control costs and scale back discretionary investments," Bloomberg Intelligence analysts Vey-Sern Ling and Tiffany Tam wrote ahead of the results.
Longer term, China's economy is growing at its slowest pace in 30 years, which could diminish spending on Baidu ads. The company fell off the list of China's five most valuable internet companies, trailing Meituan Dianping and NetEase, after shedding more than 30 per cent of its market value this year. In May, it posted its first loss since going public in 2005.