(Reuters) -Search engine giant Baidu Inc beat first-quarter revenue estimates on Tuesday as businesses spent more on advertising amid China’s economy recovery, after the country dropped most of its strict COVID curbs late last year.
Business momentum in China is building in the absence of lockdowns, with consumers and businesses reviving spending as the economy shows signs of stabilizing.
China’s economy grew at a faster-than-expected rate of 4.5% year-on-year in the three months through March, according to the latest official data. Revenue for Baidu rose 10% to 31.14 billion yuan ($4.54 billion) in the quarter to March 31, surpassing analysts’ estimates of 29.97 billion yuan, according to Refinitiv data.
Revenue from Baidu Core, which includes search-based ad sales, cloud offerings and its autonomous driving initiatives, grew 8% to 23 billion yuan.
Of this, revenue from Baidu’s largest segment, online marketing, accounted for 16.6 billion yuan, rising 6% in the reported quarter. Revenue at its streaming service iQIYI rose 15% to 8.3 billion yuan, driven by 28% growth in its subscriber base.
U.S.-listed shares of the company rose as much as 5% in premarket trading.
Baidu reported net income of 5.83 billion yuan, compared to net loss in the year-ago quarter. Excluding items, it earned 16.10 yuan per American Depository Share (ADS), higher than Wall Street’s estimate of 12.46 yuan.
The company’s much-touted rival to ChatGPT, Ernie bot, has yet to be officially launched, despite having been partially unveiled to the public in mid-March.
CEO Robin Li said in a press release on Tuesday that the company plans to “steadily incorporate” the generative AI-driven chatbot into all of the search engine giant’s businesses, without giving a specific timeline.
(Reporting by Eduardo Baptista in Beijing, Yuvraj Malik in Bengaluru; Editing by Devika Syamnath, Christina Fincher and Jan Harvey)
