Google clears Wall Street profit estimate
Google topped pessimistic Wall Street profit expectations Thursday, reporting a net income increase of 31 percent to $1.31 billion for its most recent quarter.
Excluding various items, that meant earnings per share of $4.84, well above the $4.52 expected on average by analysts surveyed by Thomson Financial. Revenue, which benefited from the acquisition of DoubleClick, was $5.2 billion in the quarter ended March 31, compared with $3.7 billion for the same period a year earlier.
(Credit: Google)The company's stock surged more than $54, or 12 percent, to $503 in after-hours trading. That's a significant step back toward the company's all-time high of $747.24 in November.
"Our ongoing innovation in search, ads, and apps (online applications) helped drive healthy growth globally across our product lines, yielding another strong quarter for Google," said Google Chief Executive Eric Schmidt in a statement.
The report comes amid fears that an economic slowdown or recession could be hurting Google's paid-click results, the number of text ads that Web searchers click on.
Google has been concentrating on showing fewer ads but making them better-suited to search results, a move it hopes increases the revenue generated by each click. But statistics from ComScore released this week show that paid clicks declined in the first quarter compared with the fourth quarter of 2007 for Google, Yahoo, and Microsoft's MSN.
Last quarter, Google's financial performance fell short of Wall Street expectations, triggering fears that economic woes might be hurting the company. Schmidt pooh-poohed the idea, at least for that quarter, by saying: "We have not yet seen any negative impact from rumors of future recessions. We'll see what happens."
Google said paid clicks increased 20 percent over the first quarter of 2007 and 4 percent over the fourth quarter of 2007.
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