(Reuters) – Chinese search engine operator Baidu Inc on Thursday reported lower-than-expected first-quarter earnings and forecast quarterly revenue below estimates, sending its shares down 8% in extended trading.
Revenue from its online marketing services business, a major contributor to overall sales, rose nearly 3% to 17.66 billion yuan ($2.57 billion), but missed estimates of $2.66 billion, according to research firm FactSet.
“Despite government policies to improve the market condition for SMEs, we anticipate online marketing in the near term to face a challenging environment,” Chief Financial Officer Herman Yu said.
Baidu forecast second-quarter revenue of 25.1 billion yuan to 26.6 billion yuan, while analysts had expected 29.30 billion yuan, according to IBES data from Refinitiv.
The company reported a net loss attributable to shareholders of 327 million yuan ($47.51 million) in the first quarter ended March 31, compared with net income of 6.69 billion yuan a year earlier.
Excluding items, the company earned 2.77 yuan per American depositary share, falling short of estimates of 2.89 yuan per ADS.
Total revenue rose 15.4% to 24.12 billion yuan ($3.50 billion). Analysts on average had expected the company to report revenue of 24.16 billion yuan, according to IBES data from Refinitiv.
Reporting by Akanksha Rana in Bengaluru and Josh Horwitz in Shanghai; Editing by Anil D’Silva
Our Standards:The Thomson Reuters Trust Principles.