SAN FRANCISCO: Google Inc blew past Wall Street’s profit and revenue expectations for the third quarter despite rising expenses, sending its shares up 9 per cent in after hours trading.
The world’s largest Internet search engine on Thursday posted a third-quarter net income of $2.17 billion or $7.64 a share, excluding items, surpassing Wall Street’s average estimate of $6.69 a share, according to Thomson Reuters I/B/E/S.
“Looks like business is solid across the board. The biggest concern for investors was expenses. Given the EPS number, it looks like margins have to be better than what the Street was expecting,” said UBS analyst Brian Pitz.
Net revenue, which excludes fees that Google pays to partner websites, came to $5.48 billion, versus expectations for $5.27 billion. Net revenue in the 2009 third quarter was $4.38 billion.
Google said that paid clicks on its search ads increased 16 per cent year-over-year, and 4 per cent from the second quarter.
Google added more than 1,500 employees to its payroll in the third quarter and its operating expenses totaled $2.19 billion, up from $1.64 billion in the year-ago quarter.
Investors have been worried that the company, seeking new sources of growth, is spending recklessly on initiatives such as its Android mobile phone software, acquisitions, renewable energy projects and even automated cars, with uncertain returns.
At the same time, social networking giant Facebook poses a growing threat to Google’s online advertising business.
Shares in the company rose in extended trading to $590.00, from a regular session close of $540.93 on Nasdaq. – Reuters