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Google handily beat analysts' expectations for both profit and revenue on Thursday, sending its shares up in after-hours trading.
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iStock |
It was the company's strongest sequential revenue growth in more than a year, as the advertising business showed signs of recovery from the global recession.
The Internet search giant said it earned $5.89 a share in its fiscal third quarter, versus a profit of $4.92 a share in the same period last year.
Revenue, which excludes $1.56 billion in traffic acquisitions costs, reached $4.38 billion compared with $4.041 billion last year.
Google [GOOG
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] was expected to turn a profit of $5.42 with $4.241 in revenue, according to a consensus estimate from Thomson Reuters.
The world's No. 1 search engine said sales in the third quarter totaled $5.94 billion, up from $5.52 billion in the second quarter and $5.54 billion in the year-earlier period.
Google has faced increased competition from Microsoft's [MSFT
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] Bing but continued to increase its market share in September, holding nearly 65 percent.
"Google has no competition. Yahoo [YHOO
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] is withering on the vine and (Microsoft's) Bing is too tiny now," said Colin Gillis, senior analyst at Brigantine Advisors. "They did great on every single metric. We think this is sustainable."
Google's CEO Eric Schmidt has drawn attention to the ad-spending recovery the company has been tracking, and the company recently announced a partnership with Verizon [VZ
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] for an Android mobile operating system.
"While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future," Chief Executive Eric Schmidt said in a statement.
He told analysts on a conference call that Google was stepping up hiring and open to acquisitions.
"We're open for business in making strategic acquisitions, both large and small," Schmidt said.
Google's shares touched another 52-week high at $535.58 on Wednsday but closed 1 percent lower at $529.91 on Thursday. Its shares have risen nearly 15 percent in recent weeks.
—Reuters contributed to this report
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