Beijing (PingWest)- Baidu booked a net revenue of CNY22.5 billion for the first quarter of 2020, down 7% from the same period of last year. Baidu’s Q1 revenue still performed better than most analyst projected despite it recorded a year-on-year decline. And the Chinese search giant gave an optimistic outlook for the rest of the year as it believes the pandemic shows signs of being under control in China.
The search giant returned to profit with CNY 41 million in net income, compared with losses of CNY 327 million a year earlier.
Sales at the Chinese internet search giant down 7% to CNY 22.5 billion in the first quarter, compared with the CNY21.9 billion average of analysts’ estimates. It forecast a revenue growth rate of -5 per cent to 4 per cent for the second quarter.
“The Covid-19 pandemic is under control in China, offline activities are rebounding and Baidu will benefit from a restart of the Chinese economy,” company’s chief executive Robin Li said in a statement.
Revenue from online marketing drop 19% to CNY14.2 billion, but the significant decline in the sector’s revenue was offset by strong revenue growth in video streaming arm iQIYI.
Revenues for streaming service IQIYI reached 7.6 billion yuan, up 9% year on year, with membership revenue growing 35%, but advertising revenue declined 27%.
In March 2020, IQYI subscribers increased 23% to 119 million, 99.2% of whom were paid members. The number of subscribing members rose 23% year over year, iQIYI said in a separate statement. Despite the revenue growth, iQIYI is still unprofitable, its net loss widened to CNY2.9 billion in the first quarter from CNY1.8 billion a year ago.
Companies in sectors like travel and health-care spent less money on advertising as their business weren’t open due to coronavirus lockdown. Baidu also blamed the lower advertising revenue to less advertising spending from small business, which got hit hard by the pandemic.
What most analysts worried is that Baidu hasn’t done as well as its rivals in attracting advertising spending from businesses. In comparison, Tencent’s advertising revenue grew 32% year-over-year, thanks to its super app WeChat.