Jul 17, 2008 3:22 pm US/Pacific
Google Disappoints With 35 Percent 2Q Profit Jump
MOUNTAIN VIEW (AP) ―
Google Inc.'s earnings growth slowed more than investors anticipated during the second quarter an indication that sluggish U.S. economy is starting to weigh on the Internet search leader.
The results released after the stock market closed Thursday caused Google shares to plunge by about 7 percent.
The company said it earned $1.25 billion, or $3.92 per share, during the three months ended in June. That represented a 35 percent increase from net income of $925.1 million, or $2.93 per share, at the same time last year.
If not for costs incurred for employee stock compensation, Google said it would have earned $4.63 per share. That figure missed the average earnings estimate of $4.74 per share among analysts surveyed by Thomson Financial.
It marked just the fourth time that Google hasn't exceeded analyst expectations in its four years as a public company.
Investors quickly expressed their dismay as Google shares plummeted $36.14, or 6.8 percent, in Thursday's extended trading after closing at $533.44, down $2.16.
Google's second-quarter revenue fared slightly better than earnings, rising 39 percent to $5.37 billion from $3.87 billion at the same time last year.
After subtracting commissions paid to its ad partners, Google's revenue totaled $3.9 billion about $30 million above the average analyst estimate.
Google offset some of the economic weakness in the United States by showing more ads to Web surfers overseas. International markets accounted for $2.8 billion, or 52 percent, of Google's second-quarter revenue.
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