Google Beats Expectations, Sending Shares Higher
Googlereported a profit that easily outpaced analysts' forecasts as the Web search and advertising leader withstood deepening economic turmoil around the globe, and the company's shares jumped in extended trading.
Excluding one-time items, Google earned $4.92 a share in the third quarter, on a topline of $4.04 billion. As is traditional with Google earnings results, that sales figure excludes TAC, or traffic-acquisition costs.
In the same period last year, Google turned in earnings of $3.91 a share on sales of $3.01 billion.
Analysts who follow the Internet search and advertising giant were calling for earnings of $4.75 a share on revenue of $4.053 billion.
Google shares climbed about 10 percent in extended trading Thursday after closing up about 4 percent at $353.02.
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.
Broad market pessimism has hammered Google's stock, which recently fell to its lowest levels in over two years.
(See the accompanying video for reaction to Google's earnings report.)
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.
- Wire services contributed to this report.