Google Inc reported on Thursday a 46 percent rise in profit that topped analysts’ expectations, as revenues grew 57 percent and comfortably outpaced expense growth, reassuring investors.
Google said it would continue significant capital spending of about half-a-billion dollars a quarter on new data centers and networks, but that it had put in place controls to rein in hiring, with staff numbers growing about 15 percent a quarter.
Third-quarter operating profit margins improved over the previous quarter and analysts said Google’s spending was more in line with growth than three months earlier, when it surprised the market with a jump in operating expenses.
Shares of Google inched into new record territory in extended trade after the results, trading up to $641.95 from a regular session close of $639.62. The stock is up 39 percent so far in 2007 versus 16 percent for Nasdaq.
“They seem to have grown better than anybody expected and seemed to have improved margins,” said Jefferies & Co. analyst Youssef Squali. “I think they were more cost-conscious this period than last.”
Net income rose to $1.07 billion, or $3.38 per diluted share, compared with the year-earlier quarter’s $733.3 million, or $2.36 per diluted share. Excluding one-time items, profit was $3.91 per share in the latest quarter, versus the Wall Street average target of $3.77, according to Reuters Estimates
Revenue rose 57 percent to $4.23 billion, compared with an average analyst forecast of $4.13 billion. Ever-larger numbers mean its growth rate is down from 70 percent in the third quarter of 2006 and 96 percent in the same period of 2005. Excluding payments to affiliates carrying ads from Google, revenue grew 61.5 percent.
Source – Yahoo