China's Baidu misses quarterly revenue estimates on advertising weakness

(Reuters) -Chinese search engine giant Baidu (NASDAQ:BIDU)’s quarterly revenue fell and was just shy of market estimates on Wednesday, signaling persistent weakness in the advertising market amid prolonged economic uncertainty.

U.S.-listed shares of the company fell about 2% in premarket trading.

Slammed by a property market downturn, weak employment rates and choppy consumer demand, companies in the world’s second-largest economy have reined in advertising spending to cut costs and protect their margins.

Baidu, which relies heavily on advertising in its search engine, also took a hit. Its core online advertising business, which typically makes up 60% of the overall company revenue, reported a 15% decrease in revenue to 16.2 billion yuan during the April-June quarter.

That eclipsed upbeat growth at the company’s AI cloud segment, which drove a 34% increase in Baidu’s non-online advertising business.

The company reported total revenue of 32.71 billion yuan ($4.56 billion) during the second quarter, down 4% from the year earlier. Analysts on average estimated 32.76 billion yuan, according to data compiled by LSEG.

($1 = 7.1784 Chinese yuan renminbi)