Google Earnings Blow Past Expectations; Shares Surge

CNBC.com with wires

Google earnings and revenue blew past expectations, sending its shares sharply higher in after-hours trading.

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Google shares finished the day at $558.99 and jumped more than 5 percent after-hours. (Click here for the latest after-hours quote.)

"Christmas came early for Google shareholders," said Colin Gillis, an analyst at BGC Partners. "It was a great beat on the bottom line. It's not necessarily because they are controlling expenses. It's because they are driving more revenue," he said.

The technology company reported earnings excluding items of $9.72 a share, up from from $7.64 per share a year ago.

Net income rose to $2.73 billion from $2.17 billion.

Net revenue, which excludes fees that Google shares with partner websites, increased 37 percent to $7.51 billion from $5.48 billion last year.

Analysts had expected Google to post earnings of $8.74 per share on net revenue of $7.22 billion.

"A lot of people were expecting spending to be out of control, but they had good control," said Herman Leung, an analyst with Susquehanna Financial Group.

Google said they're getting a good  response to their Google Plus social-networking site, which just passed the 40-million user mark.

Google Reports Earnings

Aggregate paid clicks, which come from ads on Google sites and its AdSense partners, rose 28 percent from a year earlier and the average cost-per-click increased 5 percent from a year earlier. Though, cost-per-click was down sequentially by 5 percent from the second quarter.

"The digital economy is still strong. Google is capturing all the economics from this and we are moving into the sweet spot when investors want to own Google," Gillis said.

Google is the latest company to post a better-than-expected third-quarter performance. On Wednesday, PepsiCo released earnings and revenuethat beat analysts' forecasts.

Of the 34 S&P 500 companies that have reported for the third quarter, 71 percent have beat estimates while 9 percent were in-line, and 21 percent were below estimates.

— Reuters contributed to this article.