INTERNET search giant Baidu Inc. beat quarterly earnings estimates yesterday after signing more people up to its video-streaming service, sending its shares higher in a relief rally.

Baidu reported a small 1 percent bump in revenue and a 62 percent drop in net profit for the second quarter, but the result was welcomed by investors who had feared worse amid a slowing economy and stiff competition from rivals like ByteDance’s TikTok.

Baidu’s video streaming service iQiyi was a key driver of the revenue bump as it crossed the 100 million subscriber mark in June, although there were some concerns about rising costs at the unit associated with winning and retaining viewers.

Baidu’s total revenue for the three months to the end of June rose to 26.33 billion yuan (US$3.7 billion) from 25.97 billion yuan a year earlier, beating a forecast 25.77 billion yuan, according to IBES data from Refinitiv.

Baidu earned 10.11 yuan per American depositary share, compared with expectations of 6.12 yuan per ADS.

“It makes sense that Baidu beats the estimates because analysts have lowered their expectations to the minimum,” said Connie Gu, an analyst at BOCOM International, adding the market would need to see better-than-expected results for several consecutive quarters for more sustained confidence.

Analysts said Baidu faced a longer-term structural problem, especially with the rise of new media platforms seeking to lure away subscribers.

“Competition from recently rising large-traffic platforms is becoming more and more fierce, with advertisers shifting budget to those platforms,” said Natalie Wu, an analyst at China International Capital Corporation.

(SD-Agencies)