08:55 AM EDT, 08/22/2024 (MT Newswires) -- Baidu's ( BIDU ) second-quarter revenue trailed Wall Street's estimates while earnings fell less than expected year over year as growth in the company's artificial intelligence cloud business helped offset macroeconomic headwinds impacting online marketing revenue.

The Chinese technology company, which specializes in AI and internet-related services, posted adjusted earnings of 21.02 renminbi ($2.89) per American depositary share for the June quarter, down from 22.55 renminbi a year earlier. The consensus on Capital IQ was for normalized EPS of 18.69 renminbi. Total revenue came in at 33.93 billion renminbi, compared with 34.06 billion renminbi in the prior-year quarter, missing the Street's view for 34.04 billion renminbi.

"AI Cloud continued to accelerate in the second quarter, offsetting the ongoing macro headwinds for online marketing revenue and resulting in modestly positive topline growth for Baidu Core," Chief Executive Robin Li said in a statement. "Operationally, we fast-tracked the renovation of Baidu ( BIDU ) search, which we believe will drive long-term success despite the short-term impact on monetization."

Revenue from Baidu Core, which comprises Baidu AI Cloud and Intelligent Driving, ticked up 1% year over year to 26.69 billion renminbi. Of the total, online marketing sales declined 2% to 19.2 billion renminbi, while non-online marketing revenue advanced 10% to 7.5 billion renminbi, mainly driven by the AI cloud business.

Baidu's ( BIDU ) online video platform, iQIYI (IQ), logged revenue of 7.44 billion renminbi, down from 7.8 billion renminbi in the 2023 quarter.

Cost of revenue edged 1% higher to 16.4 billion renminbi primarily due to an increase in traffic acquisition expenses and costs related to the AI cloud business. For the total company, costs and expenses fell to 27.99 billion renminbi from 28.85 billion renminbi last year.

"As we speeded up the AI-native transformation of our products in the second quarter, we continued to optimize our operations and maintained a healthy margin," Chief Financial Officer Rong Luo said. "For AI Cloud in particular, we expect growth to maintain a strong momentum."

Price: 88.90, Change: -0.84, Percent Change: -0.94