Baidu Outlook Disappoints After Covid Surge, China Crackdown
- Search giant swung to a loss after marking down Kuaishou stake
- Shares of Baidu fell more than 3% in New York after earnings
Employees stand in a lobby at the Baidu Inc. headquarters in Beijing.
Photographer: Qilai Shen/BloombergBaidu Inc. delivered a conservative outlook for the current quarter as a resurgent pandemic outbreak in China overshadowed the internet search giant’s push into newer arenas like cloud and smart devices.
Revenue for the three months ended June climbed 20% from a year earlier to 31.35 billion yuan ($4.8 billion), compared with the 30.9 billion yuan of estimates. The company predicted sales of 30.6 billion yuan to 33.5 billion yuan for the September quarter, versus the 33.1 billion yuan seen by analysts, saying that the recent increase in Covid-19 cases across large parts of China left business visibility “limited.”
Baidu swung to a net loss of 583 million yuan in the second quarter, after marking down the value of its stake in Kuaishou Technology. Shares of the livestreaming giant sank 28% in the quarter and are currently trading below its initial public offering price, as China’s tech crackdown expands beyond e-commerce and antitrust to online content. Baidu’s stock dropped 3.2% in New York trading.