HONG KONG -- Baidu, the king of search in China, on Friday morning said its quarterly net profit attributable to shareholders surged 83% from a year earlier. It credited mobile advertisements and hinted that a healthcare scandal from last year is receding.

Baidu's net profit attributable to shareholders surged to 4.41 billion yuan ($650 million) during the three months ended June. The 83% surge was far above analysts' expectations, which included Nomura International's estimate of a 20% increase. During the quarter, Baidu made "a significant improvement in our flagship mobile Baidu app," Chairman and CEO Robin Li Yanhong said during a teleconference after the results were released.

Following the announcement, Baidu's Nasdaq-listed shares jumped more than 6% in after-hours trading on Thursday, when they were treading above $216. In regular trading, the shares closed 0.08% lower, at $201.

Chief Financial Officer Jennifer Li Xinzhe during the teleconference said, "The whole business is on a good trajectory and page clicks are recovering very nicely." Revenue for the quarter increased 14.3% to 20.87 billion yuan from a year earlier. This is in line with analysts' expectations.

The earnings results suggest the company is on a recovery path, but the profit surge was also boosted by a lower base of last year. Baidu's profit during the corresponding quarter of 2016 decreased more than 34%. This followed an uproar over a cancer patient dying after ordering questionable medical treatment listed atop a Baidu search result.

Looking ahead, the company is betting on artificial intelligence to propel its growth. "We are focusing on using AI to deliver sustained search improvements and enabling a better and more natural search experience," Chief Operating Officer Qi Lu said.

To accelerate its expansion, the company has been pushing for securing global partnerships. Last week, Baidu and Microsoft announced a partnership for an autonomous driving project. Yesterday, it announced a partnership with PayPal. Lu said AI-enabled financial technologies are one of AI's "most commercially promising" applications. The new partnership with PayPal will allow Chinese users of Baidu's payment service to shop with the service overseas.

As it expands beyond search-based advertising, Baidu expects revenue to increase by a range of 26.7% to 30.1% in the third quarter through September. In yuan terms that would be 23.13 billion to 23.75 billion.

Analysts remain cautious about Baidu's AI outlook. While acknowledging the company's predominance in China's AI sector, Jialong Shi at Nomura International said it is difficult to spot where revenue will come from. "Before the market can see any concrete sign of potential monetization," he said, "it is hard for these new initiatives to be priced into Baidu's shares, in our view."

Shi is especially concerned because "other companies like Alibaba and Tencent are also ramping up investments in AI research."

Jefferies maintained its buy rating after the announcement. Karen Chan, an equity analyst at Jefferies, sees the better-than expected profit as "mainly helped by cost control in sales and marketing and traffic acquisition."