Oct 16, 2008 2:53 pm US/Pacific
Google Boosts Profit; 3Q Results Beat Expectations
MOUNTAIN VIEW (AP) ―
Google Inc. shook off the economic doldrums to deliver a third-quarter profit that topped analysts' expectations, supporting the Internet search leader's theory that its advertising system will prosper even in tough times.
The Mountain View-based company said Thursday that it made $1.35 billion, $4.24 per share. The profit rose 26 percent from $1.07 billion, or $3.38 per share, at the same time last year.
Excluding costs for employee stock compensation, Google said it would have made $4.92 per share. That figure surpassed the average estimate of $4.75 per share among analysts polled by Thomson Reuters.
Revenue climbed 31 percent to $5.54 billion. After subtracting advertising commissions, Google's revenue totaled $4.04 billion— about $20 million below analyst estimates.
Analysts had been decreasing their projections amid cascading waves of investor pessimism that pounded Google's stock price to a three-year low of $309.44 earlier Thursday. The shares subsequently rebounded with the rest of the market later in the day to close at $353.02, up $13.85, and then surged by another $40.98, or 11.6 percent, in extended trading after the company released its third-quarter results.
The pleasant surprise helped ease fears that online advertisers will stop pouring as much money into Google in an effort to save money in an economy that appears headed toward its worst recession since the early 1980s.
Google executives have maintained that the company can still thrive because its technology does a better job of finding customers at a lower cost to advertisers than traditional marketing campaigns. Those factors, Google argues, means it could receive an even bigger slice of advertising budgets in a crumbling economy.
Google Chairman Eric Schmidt, though, acknowledged that even the Internet's most profitable company might not be immune to the fallout from the worst financial crisis in the United States since the stock market crashed in 1929.
"While we are realistic about the poor state of the global economy, we will continue to manage Google for the long term," Schmidt said in a statement.
(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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