By Tracy Qu
Baidu's shares tumbled in Hong Kong after the Chinese tech giant revealed its revenue had dropped for a second consecutive quarter.
The Beijing-based company reported overnight that its third-quarter revenue fell 2.6%, roughly in line with expectations but distinctly worse than the 0.4% slip in the second quarter. Sales from online-marketing services, which make up more than half of overall revenue, fell 5.8%.
Baidu, once considered one of China's technology titans, has been pressured on both the profit and revenue fronts recent quarters. It has been looking for new growth drivers in fields such as artificial intelligence, cloud computing and self-driving technology but they haven't borne fruit.
Its stock declined as much as 10% in early Hong Kong trade Friday and was down 9.1% at 76.25 Hong Kong dollars at midday break, the equivalent of $9.80. Baidu's ADRs fell 5.9% to $81.63 in the U.S. after earnings were released on Thursday.
Analysts remain cautious about a recovery in Baidu's advertising business.
Daiwa analyst John Choi says the segment lacks a clear path for growth and expects the fall in fourth-quarter core online marketing revenue to widen to 7.5% on year. Daiwa cut its target price for Baidu's Hong Kong stock to HK$115.00 from HK$128.00 but maintained its buy rating.
Citi analysts led by Alicia Yap also lowered their 2025 their revenue and adjusted net profit forecast by 1.5% and 2.6%, respectively, following the latest earnings results.
There hasn't been a notable improvement in advertising spending and consumer spending remains cautious, the analysts write in a research note, citing management's remarks.
Citi maintains its a buy rating but trims its ADR target to $142.00 from $143.00.
Write to Tracy Qu at tracy.qu@wsj.com
(END) Dow Jones Newswires
November 21, 2024 23:17 ET (04:17 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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