Aug 18 (Reuters) – China’s Baidu missed Wall Street estimates for second-quarter revenue on Tuesday as declines in its core advertising business offset growth in AI-linked cloud services, sending its U.S.-listed shares down 3.5% in premarket trading.
A prolonged downturn in China’s property sector and weak consumer spending have led businesses to cut marketing budgets, weighing on advertising demand and pressuring Baidu’s online marketing business.
The internet search provider’s advertising business also faced pressure from changes in spending during China’s mid-year 618 shopping festival as e-commerce platforms redirected promotional budgets toward user subsidies rather than traffic acquisition.
The online marketing services segment reported total revenue of 13.1 billion yuan in the quarter ended June, down 19% from a year ago.
The company reported a 4% decline in revenue to 31.33 billion yuan ($4.65 billion) in the second quarter, compared with analysts’ average estimate of 31.96 billion yuan, according to data compiled by LSEG.
($1 = 6.7423 Chinese yuan renminbi)
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Pooja Desai)
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