What happened
The stock market can be very unforgiving of a company that misses any quarterly estimate, particularly with its guidance. That was the dynamic at play with China-based digital media company iQiyi (IQ -2.62%) on Wednesday after the company delivered a squirm-inducing set of results for its third quarter; its shares fell by over 17% on the day.
So what
For the quarter, iQiyi earned revenue of 7.6 billion yuan ($1.2 billion), which represented 6% growth over the same period last year. That figure more or less met the average analyst estimate.
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The story was different on the bottom line for the ambitious media company. Net loss deepened, coming in at 1.7 billion yuan ($266 million), equating to $0.34 per each iQiyi American depositary share, against analyst expectations of a $0.33 per share loss. The year-ago shortfall was just shy of 1.2 billion yuan ($188 million).
Across the quarter, "we experienced significant uncertainty in terms of content scheduling, which resulted in softer than expected top-line performance," iQiyi quoted its founder CEO Yu Gong as saying. He pledged that the company would continue its efforts to make its operations more efficient, and to develop potentially lucrative new revenue streams.
Now what
Unfortunately for iQiyi's near-term prospects, management believes that uncertainty will hang over its head and affect its performance. For the current Q4, it's guiding for revenue of 7.08 billion yuan ($1.11 billion) to 7.53 billion yuan ($1.18 billion). The top end of that range represents only 1% year-over-year growth, and is lower than the average $1.21 billion forecast by analysts.
iQiyi did not proffer any profitability estimates.
