Baidu Posts Net Loss of $47 Million for First Quarter

Baidu Posts Net Loss of $47 Million for First Quarter

Search and artificial intelligence (AI) giant Baidu has reported a quarterly net loss for the first time since listing in 2005, as the company grapples with China's slowing economy and increased competition while spending on promotional activities skyrocketed.

"Baidu Q1 results were solid, with revenues reaching RMB 24.1 billion, up 15% year over year, or 21% year over year, excluding revenue from divested business, and margins were dampened by our successful CCTV New Year Eve Gala marketing campaign, which accelerated the traffic of Baidu family of apps and highlighted better in-app search user experience", said Herman Yu, CFO of Baidu in a statement. Analysts polled by FactSet had expected adjusted earnings of 40 cents a share on sales $3.53 billion for the company. Baidu also estimated sales drop. Visit MarketWatch.com for more information on this news.

Baidu ended March with cash, cash equivalents, restricted cash and short-term investments of CNY 143.6 billion (approximately Dollars 21.40 billion).

Baidu which has been pursuing new areas of growth such as in newsfeeds, short videos and autonomous driving has been pouring cash into these initiatives hoping to transform itself into a mobile-driven AI company.

"We will take this opportunity to improve our monetisation capabilities and review our businesses for operational efficiency".

Baidu also said Hailong Xiang, senior vice president of its search business, has resigned for "personal reasons".

Considered China's answer to Google, Baidu has traditionally relied on advertising for much of its revenue, a sector that is particularly vulnerable to economic slowdowns like the one China is now experiencing. Baidu App daily active users rose 28% from a year ago to reach 174 million, and its Haokan daily active users in March 2019 rose by 768% from a year ago and 16% sequentially to 22 million. And what was included here barely scratches the surface. Baidu shares fell around 9% in aftermarket trading following the release of its results.

The company also reported a management change. The prior consensus target price was $210.02, and Baidu closed with a $53.7 billion market cap.

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