By Tracy Qu


Chinese search-engine giant Baidu reported lower revenue for the second straight quarter as advertising demand continued to be weak amid an economy struggling to regain momentum.

The Beijing-based internet company said Thursday that third-quarter revenue fell 2.6% from a year earlier to 33.56 billion yuan, equivalent to $4.63 billion, roughly in line with analysts' estimates of 33.88 billion yuan.

Net profit rose 14% to 7.63 billion yuan, exceeding the 5.02 billion yuan expected by analysts in a FactSet poll.

Once considered one of China's important technology titans alongside Alibaba and Tencent, Baidu has been facing pressure on both the profit and revenue lines. China's biggest search-engine operator has been seeking new growth engines in fields such as artificial intelligence, cloud computing and self-driving technology. It unveiled a number of new AI applications earlier this month, including a text-to-image generation technology. Its Ernie Bot is one of China's most popular ChatGPT-style chatbots.

"Baidu Core's flattish third quarter top line reflected the ongoing weakness in our online marketing business, offset by the growth of our AI Cloud business. Our strong AI capabilities are gaining broader market recognition, as evidenced by increasing adoption of ERNIE," said Robin Li, the company's co-founder and chief executive.

Sales from online-marketing services, which make up more than half of overall revenue, fell 5.8%. Revenue from the company's iQIYI video-streaming service dropped about 10%.

Adjusted net profit, which excludes the effects of share-based compensation expenses, fair-value changes in long-term investments, and disposal gains and losses, among other things, declined 19% to 5.89 billion yuan. Analysts had expected 6.27 billion yuan, according to FactSet.

Alibaba last week reported a roughly 5% increase in revenue for the September quarter, below market expectations. Tencent also posted single-digit quarterly revenue growth, with net profit jumping 47%.

Baidu's American depositary receipts were recently 2.65% lower in premarket trading after the results.


Write to Tracy Qu at tracy.qu@wsj.com


(END) Dow Jones Newswires

11-21-24 0607ET