Baidu swings to Q3 profit, citing ‘recovery’ in China

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American depositary receipts of Baidu Inc. rose 1% in after-hours Monday after the Chinese internet giant reported a third-quarter profit above Wall Street expectations and said it had been able to sidestep China’s second COVID-19 wave. Baidu said it earned $2 billion, or $5.86 per ADR, in the quarter, reversing a loss of $2.63 per ADR in the year-ago period. Adjusted for one-time items, Baidu gained $1.03 billion, or $3 a share, the company said. Sales rose 1% to $4.16 billion. Analysts polled by FactSet expected Baidu to report adjusted earnings per ADR of $1.99 on sales of $4.16 billion. “Our revenue growth turned positive in the third quarter with many advertising verticals turning around, putting Baidu in a good position to further benefit from a recovery in the Chinese economy,” the company said in a statement. “Our team executed in the third quarter with top line growth, resilient profitability and strong cash flow, a testament to the durability of Baidu’s business, despite China experiencing a second wave of COVID-19 in July.”
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