Baidu Inc. (NASDAQ: BIDU) expects a disappointing revenue outlook for the rest of the year due to lost advertising sales during this month’s Communist Party Congress which lead to falling shares. The search engine giant expected fourth quarter revenue growth of 22% to 29% last year which is below average analyst forecast of 36%. Third quarter revenue however, increased 29% to $3.5 billion which matched predictions. Baidu’s American listed shares dropped more than 10% in extended trading which sparked concerns as the company tries to reshape their business around autonomous driving and artificial intelligence.
The search engine giant reported a 69% increase in operating income to $707 million in the most recent quarter where net income more than double to 7.9 billion yuan. Despite this, Baidu is still trying to recover after advertising and content businesses were hit by a recent drive to censor and regulate online media. In the third quarter, ad business had 486,000 active online marketing customers which is a 3% gain from the previous quarter but still was down 7% from a year earlier.
Herman Yu, Chief Financial Officer of Baidu said, "In the third quarter, we also spun off Baidu Deliveries, as part of a year-long strategy to free up the company's resources and management attention to focus on AI and projects with strong synergy that will optimize Baidu's long term value."