(Reuters) - Baidu Inc (BIDU.O) reported a second straight drop in quarterly revenue as regulatory scrutiny into healthcare and related advertisements continued to take a toll on the Chinese internet search giant.
The company's revenue fell 2.6 percent to 18.21 billion yuan ($2.65 billion) in the fourth quarter ended Dec. 31 from 18.70 billion yuan a year earlier.
Analysts on average had expected revenue of 18.23 billion yuan, according to Thomson Reuters I/B/E/S.
The drop, however, was within the 17.84-18.38 billion yuan range the company had previously forecast.
The revenue slowdown comes as Baidu rides out a public and regulatory backlash triggered by the death of a 21-year-old student who underwent an experimental cancer treatment that he found using the company's search engine.
Analysts estimate that healthcare accounts for about 20-30 percent of Baidu's search revenue, which represents more than 80 percent of the company's total sales.
Net income fell 83.3 percent to 4.13 billion yuan.
However, Baidu's U.S.-listed shares rose 2.4 percent after the bell on Thursday as the company's adjusted profit came well above analysts' estimate.
The company earned $6.49 per share, excluding items, while analysts were expecting $6.07.
"We look forward to 2017 as a time of recovery and growth," Chief Financial Officer Jennifer Li said in a statement.
The company's online marketing revenue also fell 8.2 percent to 16.17 billion yuan.
(Reporting by Laharee Chatterjee in Bengaluru; Editing by Anil D'Silva)