Baidu Profit Rises in Rebound From Chinese Government Crackdown

China's internet-search leader Baidu Inc. posted its first profit increase in three quarters as it earned more money per advertiser while working to extend its reach beyond its core business.

Chief Operating Officer Qi Lu said the company, which is transforming around artificial-intelligence, had seen strong progress in its mobile app and newsfeed advertising, which have been key in boosting the company's top- and bottom line.

Baidu's American depositary receipts, which set a 52-week high in New York trading on Thursday, rose 7% to $214.19 after hours.

The Beijing-based company's business suffered in its last fiscal year, posting a 67% decline in annual profit, after Chinese authorities ordered it to revamp advertising practices.

The tougher requirements forced Baidu to drop advertisers and in the latest period, Baidu reported a 21% decline in active marketing customers. However, online marketing revenue rose 5.6% as Baidu said it made more money for each online advertiser.

Baidu has also been expanding beyond its core online advertising business into fields such as artificial intelligence, financial services and driverless cars.

Over all, second-quarter profit surged 83% to 4.42 billion yuan ($651 million), or 11.31 yuan an ADR. Excluding stock-based compensation and other items, profit nearly doubled to 16 yuan an ADR from 8.08 yuan a year earlier.

Meanwhile, revenue rose to 20.87 billion yuan -- in line with Baidu's guidance -- from 18.26 billion yuan a year earlier.

Analysts surveyed by Thomson Reuters had expected 10.23 yuan in adjusted profit on 20.79 billion yuan in revenue.

For the current quarter, Baidu projects revenue of 23.13 billion yuan to 23.75 billion yuan, compared with analysts' 23.17 billion yuan.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

July 27, 2017 18:53 ET (22:53 GMT)