10:41 AM EST, 11/21/2024 (MT Newswires) -- Baidu's ( BIDU ) third-quarter earnings came in below Wall Street estimates while revenue edged past expectations as growth in the company's artificial intelligence cloud business was offset by ongoing declines in online marketing sales.

The Chinese technology company, which specializes in AI and internet-related services, posted adjusted earnings of 16.60 renminbi ($2.37) per American depositary share for the September quarter, down from 20.40 renminbi the year before. The consensus on FactSet was for non-GAAP EPS of 17.46 renminbi.

Total revenue came in at 33.56 billion renminbi, lower than the 34.45 billion renminbi recorded in the prior-year quarter, but just ahead of the Street's view for 33.54 billion renminbi. The company's Nasdaq-listed American depositary receipts fell 7.2% in Thursday trading.

Revenue from Baidu Core, which comprises Baidu AI Cloud and Intelligent Driving, edged down to 26.52 billion renminbi from 26.57 billion last year, reflecting "ongoing weakness" in the online marketing business, Chief Executive Robin Li said in a statement. Online marketing sales declined 4% year over year to 18.8 billion renminbi, while non-online marketing revenue advanced 12% to 7.7 billion renminbi, mainly driven by the AI cloud business.

"Baidu Core's operating margins remained stable as we managed to further optimize costs and realize more cost efficiencies between business units," interim Chief Financial Officer Junjie He said. "AI cloud continued to show healthy and sustainable development in the third quarter."

Revenue from Baidu's ( BIDU ) online video platform, iQIYI (IQ), dropped 10% to 7.25 billion renminbi.

Cost of revenue ticked up 1% to 16.4 billion renminbi primarily due to an increase in traffic acquisition expenses and costs related to the AI cloud business. Across the entire company, total costs and expenses fell to 27.63 billion renminbi from 28.17 billion renminbi last year.

"Despite the near-term pressures, we remain steadfast in our AI-focused strategy and are confident in our long-term trajectory," according to Li.

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