Baidu's Q4 revenue stronger than expected

Search giant Baidu climbed nearly 4 percent in pre-market trading on Thursday after posting a stronger-than-expected revenue in the fourth quarter and higher guidance for the current quarter.

Total revenue reached 30.3 billion yuan (US$4.64 billion), adding 5 percent year over year, while profit was down 18 percent to 5.2 billion yuan after higher research and development expenses.

Its core search business reported 23.1 billion yuan of income and non-advertising revenue surged 52 percent while full-year revenue was generally flat in 2020 at 107.1 billion yuan. 

“Baidu ended 2020 on a solid note with our business benefiting from an improving macroeconomic environment and digitalization of the industrial Internet," said Robin Li, the company’s co-founder and CEO.

“Baidu is well positioned as a leading AI company with a strong Internet foundation to seize the huge market opportunities in cloud services, autonomous driving, smart transportation and other AI opportunities," he noted.

The majority of Baidu’s income comes from advertising sales on its core search service, which turned positive in the third quarter after the resumption of most business activities. 

Its video-streaming affiliate iQiyi said paid subscribers fell by 3.1 million to 101.7 million in December.

It expects revenue in the first quarter this year to be between 26 billion yuan and 28.5 billion yuan, higher than a market estimate of 25.79 billion yuan.

Its NASDAQ shares gained more than 70 percent last year and climbed above US$300 in early February, the highest level since May 2018 as investors remain upbeat about autonomous driving initiatives.