By Maria Armental 



  Video-streaming platform iQiyi Inc.'s American depositary shares fell Tuesday after the Chinese company warned advertising revenue would remained challenged this quarter as some shows are delayed due to the pandemic. 


  ADRs traded Tuesday as low as $16.56 before recovering to $17.86, down 2.6% for the day. 


  Chief Executive Tim Gong Yu, in a conference call with analysts to discuss first-quarter results, said ad revenue is expected to recover from the first quarter but would be lower than last year's as shows are being pushed out to the third and even fourth quarter due to production delays tied to the pandemic. 


  IQiyi projected 7.25 billion yuan to 7.67 billion yuan in total net revenue ($1.02 billion to $1.08 billion), which was short of analysts projection at the time, according to FactSet. 


  IQiyi, which went public in 2018 but remains controlled by China's Baidu Inc., reported a 27% drop in online advertising services revenue for the March quarter. 


  Overall, iQiyi's first-quarter loss widened to 2.87 billion yuan ($406 million) from a loss of 1.81 billion yuan a year earlier. 


  Total revenue, meanwhile, rose to 7.65 billion yuan ($1.1 billion) from 6.99 billion yuan a year earlier and ahead of analysts' projections, according to FactSet. 


  Company officials said advertising sales in China, especially sponsorship advertising, had returned to near pre-pandemic levels. But international clients are expected to take two to three months longer than domestic clients, company officials said. 


  On the other hand, pandemic-related stay-at-home orders helped the company's businesses, with a net 12 million subscribers added during the quarter and bringing iQiyi's total subscribers to 118.9 million as of March 31. 


  Still, company officials pointed to lower demand in the second quarter and noted that iQiyi could struggle to retain paying members due to, for example, a delayed box-office window, and therefore online airing window for many theatrical films that typically play an important role in subscriber retention. 


  Content production, company officials said, is largely back up and running since late March and gradually returning to normal levels. 


  In the meantime, iQiyi has reduced membership discounts and eliminated less-efficient bundled membership and plans to launch a premium package, S-diamond Membership, that among other things would offer early access to advanced drama episodes and integrate content from other packages, such as Gold membership, VR membership and Sports membership. 


  Company officials, without giving an exact timetable, said outlook on the long-term development of the business and path to profitability was unchanged. 


  Write to Maria Armental at maria.armental@wsj.com