China's leading search engine provider posted mixed quarterly results after Tuesday's market close. Expectations weren't high for Baidu (BIDU -1.78%) heading into this week's financial update. The stock actually hit another 52-week low on Tuesday. The bar was set, and that bar was set low.

Baidu's third quarter did live up to its earlier revenue guidance. Profits continue to grow even faster than revenue, another welcome trend. However, Baidu is eyeing decelerating growth in the fourth quarter, and that's never a good look. Investors weren't holding out for a perfect report. Baidu stock closing on Tuesday 35% below its springtime high has a funny way of nipping optimism in the bud. Throw in the heightened risks of buying into Chinese growth stocks these days, and Baidu's mixed showing -- solid looking back and hesitant looking forward -- is apparently the balanced performance that makes sense with where the stock is now. 

Baidu's U.S. headquarters.

Image source: Baidu.

Into the mix

Revenue rose 27% to hit the U.S. equivalent of $4.11 billion, roughly the midpoint of the 23% to 30% growth that it was targeting three months ago. Baidu's bread-and-butter online advertising business continues to lead the way. Online marketing revenue rose 18% to $3.27 billion, accounting for nearly 80% of the revenue mix. A 7% uptick in active online marketing customers and a 12% surge in spending per customer helped deliver another period of double-digit percentage growth, and don't sleep on the significance of the latter of those two metrics. Revenue per online marketing customer rising a hearty 12% validates the platform. You'll know Baidu is falling out of favor with consumers and advertisers the moment that marketers aren't leaning on the platform with the same voraciousness as before.

If a segment accounting for nearly four-fifths of Baidu's total revenue is growing at an 18% clip, that naturally means that the other 20% is growing even faster. Other revenues at Baidu soared 80% during the period, led primarily by the booming popularity of premium iQiyi (IQ -9.15%) memberships and its other growth initiatives. Baidu spun off iQiyi earlier this year, but its remaining stake in the video streaming platform continues to be a driver in padding overall growth. 

The bottom line cleaned up even nicer. One-time gains on divestitures padded net income, but even without that infusion, adjusted earnings soared 47% to land on $2.77 a share. Baidu doesn't offer bottom-line guidance, but once again, Baidu landed well ahead of where analysts were parked.

Looking out to the current quarter, Baidu sees 15% to 20% top-line growth. Selling off secondary businesses over the past year is weighing on growth, but even adjusted for those asset sales would see top-line growth slow to between 20% and 26%.

Baidu continues to be a money machine. It closed out the third quarter with $15.22 billion in cash and short-term investments. It has spent nearly $500 million on buybacks since June, which may not seem all that smart with the stock continuing to hit new lows this week but may be something that investors will be grateful for if the stock eventually bounces back.