Baidu's financial performance continued to deteriorate in the second quarter as the Chinese internet titan works to remake itself into an artificial-intelligence company. The Beijing-based company, once considered China's answer to Google, has been pouring money into AI, autonomous driving and chip design even as its bread-and-butter advertising business has continued to shrink.

These investments have been slow to show results: Its net profit more than halved for the third consecutive quarter, while revenue has declined for more than a year. On Tuesday, Baidu reported a 68% drop in second-quarter net profit to 2.32 billion yuan, equivalent to $344.2 million.

Revenue came to 31.325 billion yuan, down 4.2% from a year earlier. Analysts had expected net profit of 2.82 billion yuan on revenue of 31.34 billion yuan, according to a Fact Set consensus estimate.