Shares of JOYY (NASDAQ:YY) jumped as much as 13% today after the company reported third-quarter earnings. JOYY also announced that Chinese search giant Baidu (NASDAQ:BIDU) would acquire its live streaming business. As of 2:35 p.m. EST, the stock had given up much of those gains and was up just 3%.
Revenue in the third quarter came in at 6.3 billion yuan ($925.9 million), ahead of the consensus estimate of $899.2 million. That translated into adjusted earnings per American depositary share (ADS) of $1.31, which also topped the $1 per ADS in adjusted profits that analysts were modeling for. The Chinese technology company, which operates social media platforms, said global average mobile monthly active users (MAUs) declined to 390.1 million after the Indian government blocked certain apps.
"Despite uncertainties from macro perspective, we remained focused on executing our dual-engine growth strategy in the third quarter of 2020," CEO David Xueling Li said in a statement. "Through a combination of globalized market reach and localized operations management, we continued to achieve solid growth in our financial results."
Baidu has agreed to acquire JOYY's live streaming business, YY Live, for $3.6 billion in cash. The deal is expected to close in the first half of 2021. That's a significant transaction that includes a large part of YY's overall business, and Li says the company will explore new areas such as opportunities in industrial artificial intelligence.
Due to the broad implications of the divestiture, YY opted not to provide revenue guidance for the fourth quarter.