Baidu rises as Q3 results beat estimates, company gets approval for driverless testing

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Baidu (NASDAQ:BIDU) shares rose in premarket trading on Tuesday as the Chinese tech giant reported third-quarter results that topped estimates and said it had received approval to test driverless vehicles in Beijing.

For the period ending September 30, Baidu (BIDU) generated $2.37 per share on $4.57B, or RMB 32.5B, up 2% year-over-year. Helping the sales growth was a return to growth for Baidu Core.

Analysts were expecting the company to report $2.20 per share in earnings and $4.56B in revenue.

Also included in the $4.57B in revenue was $916M attributable to non-online marketing revenue, up 25% year-over-year, as Baidu AI Cloud saw revenues rise 24% year-over-year.

In a statement, Baidu (BIDU) also noted that adjusted operating income for Baidu Core was $935M and adjusted operating margin was 26%, as the company continued to focus on "quality revenue growth," Rong Luo, CFO of Baidu, said.

At the end of September Baidu (BIDU) said it had 634M monthly active users, while iQIYI (NASDAQ:IQ), which Baidu holds a stake in, had 101M subscribers at the end of the third-quarter, down from 104.7M in the year-ago period.

In conjunction with the results, Baidu (BIDU) said it was granted driverless testing in Beijing, as the company's Apollo autonomous driving continues to make traction.

Baidu (BIDU) shares rose nearly 2% in premarket trading, while iQIYI (IQ) tacked on more than 4.5%.

A recent report from Mizuho Securities said that Baidu (BIDU), along with JD.com (JD), were its top picks in the Chinese internet sector, despite concerns about the road ahead.