Google shares hit a new high in after-hours trading Thursday after the Internet giant's earnings blew past expectations as its advertising business expanded.
Google shares, which are up around 24 percent this year, rose more than 5 percent in after-hours trading, topping $948 a share. The previous high was $924.30, set on July 15. (Click here for the latest after-hours quote.)
"They were able to grow their revenue pretty substantially, particularly in their own websites, in spite of having lower overall ad prices,'' said JMP Securities analyst Ronald Josey.
Net income rose 36 percent to $2.97 billion, or $8.75 a share, in the third quarter from $2.18 billion, or $6.53 a share, in the year-earlier period.
(Read more: Don't sell Google on earnings pop: trader)
Excluding items, Google said earnings rose to $10.74 per share. Revenue increased 12 percent to $14.89 billion from $13.3 billion a year ago.
Analysts had expected Google to report earnings excluding items of $10.34 a share on $14.79 billion in revenue, according to a consensus estimate from Thomson Reuters.
The average "cost-per-click"—the price that advertisers pay Google every time someone clicks on their ad—fell around 8 percent from the same period last year. Paid clicks increased by 26 percent. Internationally-generated revenue represented 56 percent of the total revenue, up from last year's 53 percent.
"That's the key story, their ad-volume growth is outpacing the decline cost per clicks,'' Josey said.
Google's CEO Larry Page said during a conference call after the earnings announcement that mobile traffic is gaining significant importance.
"Almost 40 percent of YouTube traffic now comes from mobile, up from 6 percent two years ago," he said. "I'm spending most of my time on mobile, not so much on desktop— that's what people will do over time."
Operating loss at Motorola, Google's mobile phone business, totaled $248 million during the third quarter, compared to a loss of $192 million in the third quarter of 2012.
— Reuters contributed to this article.
The comparable year-earlier revenue figure for Google is $13.3 billion.