After Hours: Baidu and iQiyi report strongly Different Q2s

Some investors are staring across the Pacific tonight. That's because a couple of related Chinese technology companies, Baidu (NASDAQ: BIDU) and iQIYI (NASDAQ: IQ) reported Q2 in 2019 financial results after the market closes .

In many ways it was a tale of two techniques. Here's the lean:

  Computer keyboard with Chinese flag graphics on one of the keys.

Image Source: Getty Images.

Baidu Q2: Big profit surprise

Baidu is quite the recovery story tonight. Knocked down in the stock market lately, the internet service company delivered quarterly results that convincingly beat analysts' expectations ̵[ads1]1; especially for profitability.

In the second quarter, Baidu had just over 26.3 billion yuan ($ 3.84 billion) on the top line. Although this was only 1% higher than in the same quarter last year, it topped the average analyst estimate of 25.8 billion yuan ($ 3.77 billion).

In terms of non-GAAP (adjusted) net income, the company earned $ 3.6 billion yuan ($ 529 million), or $ 1.47 per US deposit receipt (ADR). As with revenues, this was far lower than in the same frame the year before (7.7 billion yuan, or $ 1.1 billion). Still, it was significantly higher than the $ 0.88 forecasted by forecasters.

Expectations were quite subdued due to concerns about the pace of Chinese economic growth. Nevertheless, Baidu saw significantly increased utilization of its mobile app, plus encouraging gains in website traffic.

By adding more gains to an already very bullish day for the stock, Baidu is up almost 8% in after-hours trading. [19659014] iQiyi Q2: Bottom Line Whiff

In contrast, video streaming specialist iQiyi – which was founded and still is majority owned by Baidu – fell below bottom line expectations.

The company's Q2 figures revealed a 15% increase in revenue to 7.1 billion yuan, or $ 1 billion. This was helped to a small extent by a 50% increase in the subscriber base (to over 100 million people) and a 38% improvement in revenue from member services.

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However, iQiyi posted a net loss of 2.3 billion yuan ($ 339 million, or $ 0.49 per share). This was deeper than the $ 2.1 billion net loss in Q2 2018.

It was also deeper than the average analyst's estimate of a $ 0.45 loss per share. Revenue broadly met expectations.

Despite increased revenue for subscribers and membership services, iQiyi was hit by yet another decline in revenue for online advertising services. This quarter, it fell 16% year-on-year to land at 2.2 billion yuan ($ 321 million).

The company provided net revenue management for its current Q3. It believes the record will amount to 7.21 billion yuan ($ 1.03 billion) and $ 7.63 billion ($ 1.09 billion) for the quarter.

IQiyi's shares are also moving in a different direction from their parents. It is currently down by 9% tonight.

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