China’s Baidu Posted Better-than-Expected Quarterly Earnings

Chinese internet search giant Baidu, Inc. (NASDAQ: BIDU) on Tuesday announced second quarter earnings that beat analysts’ estimates. But its shares are still down 5%.

The Beijing-based company said total revenue rose 32% to RMB 26 Billion (USD 3.93 Billion) in the second quarter. Online advertisement revenue increased 28% year over year to RMB 20 Billion. Mobile revenue now account about 77% of the total revenue.

Net income jumped 45% to RMB 6.4 Billion (USD 967 Million) in the quarter ended June 30, 2018. Excluding certain items, the Company earned RMB 21 peer ADS.

The robust growth of online ad revenue is due to the technology improvement in its mobile app. The Company said AI technology help its app provide better offerings based on users’ viewing habits and search history.

Baidu also invests heavily in artificial intelligence and self-driving vehicles to boost future growth. Its research and development expenses jumped 28% year over year to RMB 4 Billion.

"We had another strong quarter in Q2 with search exhibiting robust revenue growth driven by AI-powered monetization capabilities and Baidu feed continuing strong traffic and monetization momentum," said Robin Li, Chairman and CEO of Baidu. "On DuerOS, we are excited about the newly launched Xiaodu series speakers and the adoption of DuerOS, which handled over 400 million queries in June 2018, almost doubling the workload again over a three-month span. On Apollo, we worked with King Long Motor and Neolix Technology to launch two fully autonomous L4 vehicles. These strong results are testament of our ability to focus and execute on our strategy to solidify Baidu's mobile foundation and lead in AI."

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