GOOG beats despite all bad things

GOOG beats despite all bad things

What a great tone!

Google Profit Climbs 19% Despite Slower Growth

Google Inc.'s second-quarter earnings rose 19%, but paid clicks fell from the previous quarter and revenue growth continued to slow.

The Internet search giant Thursday posted a profit of $1.48 billion, or $4.66 a share, compared with $1.25 billion, or $3.92 a share, in the same quarter last year.

Revenue rose 2.9% to $5.52 billion. Traffic-acquisition costs, or commissions paid to marketing partners, totaled $1.45 billion, or 27% of advertising revenue.

"Google had a very good quarter, especially given the continued macro-economic downturn," Chief Executive Eric Schmidt said in a statement.

Google has been holding up somewhat better than many other technology companies, though it has recently cut jobs for the first time ever. The full-time payroll dropped 1.8% during the quarter.

Google also faces a new challenge from Microsoft Corp.'s bing.com. Google plans to fire a return salvo with its Chrome operating system, which is aimed at the heart of Microsoft's business.

Google's U.S. paid clicks -- a measure of how frequently consumers clicked on its ads -- grew 15% from a year earlier but were down 2% from the first quarter.

Google quarterly profit beats expectations

SAN FRANCISCO (Reuters) - Google Inc's (NasdaqGS:GOOG - News) quarterly profit and revenue rose in the second quarter despite the tough advertising market, beating Wall Street expectations.

The Web search leader said on Thursday that revenue in the three months ended June 30 totaled $5.52 billion, compared with $5.37 billion a year earlier. Analysts were looking for $5.49 billion, according to Reuters Estimates.

Google posted net income of $1.48 billion, or $4.66 a share, compared with $1.25 billion, or $3.92 a share, in the year-ago period.

Excluding certain items Google earned $5.36 a share, ahead of the $5.08 per share expected by analysts.

The Mountain View, California, company did not provide a financial outlook, in keeping with its custom.

Shares of Google fell to $432.00 in after-hours trade on Thursday, from their Nasdaq close of $442.60.

Google beats the street in tough ad scene

The Internet search giant posts profit and sales up from the same quarter a year ago.

NEW YORK (CNNMoney.com) -- Google posted second-quarter sales and profit that beat Wall Street's forecasts Thursday, despite a tough environment for advertising.

Net income for the three months ended June 30 rose 19% to $1.48 billion, or $4.66 per share, compared with $1.25 billion, or $3.92 per share, for the same period a year ago.

Without one-time charges, Google (GOOG, Fortune 500) reported earnings of $5.36 per share. Analysts polled by Thomson Reuters, who typically strip out special items from their forecasts, were looking for $5.09 per share.

Sales rose 3% to $5.52 billion from $5.37 billion for the year ago period. Excluding commissions paid to advertising partners, sales totaled $4.07 billion, which beat analysts estimates of $4.06 billion.

"Google had a very good quarter, especially given the continued macro-economic downturn," Eric Schmidt, chief executive of Google, said in a written statement. "These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs."

Shares closed up $4.43 to $442.60 a share in regular session trade.

Investors are looking closely at the big tech bellwethers' second-quarter results for signs of a turnaround. On Tuesday, the world's largest chipmaker, Intel (INTC, Fortune 500), posted a decline in sales but was optimistic that business was picking up headed into the second half of 2009. IBM (IBM, Fortune 500) also reports second-quarter results Thursday.

Ad sales account for almost all of Google's revenue. In the fourth quarter of 2008, the company posted its first-ever quarterly profit drop, as it was hard hit by a pullback in advertising dollars during the recession.

The company remains the dominant Internet search leader, with 65% of market share in June, according to a report released Wednesday by online data tracker comScore. Yahoo (YHOO, Fortune 500) is holding steady in second place, with 19.6%, of the market, and Microsoft's (MSFT, Fortune 500) new search engine, Bing, scooped up 8.4%.

Google's slowing ad sales trump record 2Q profit

Google's slowing revenue growth overshadows record 2Q profit that tops analyst estimates

SAN FRANCISCO (AP) -- Google Inc. made more money than ever in the second quarter, even though its revenue growth slowed like never before.

The latter part of that paradox bothered investors, causing Google shares to fall $10.50, or 2.4 percent, to $432.10 in trading Friday morning. The second-quarter results were released Thursday after the market closed.

The market's negative reaction largely reflected the high expectations surrounding Google. Since falling below $300 in early March, its stock price had surged by about 50 percent because of Wall Street's faith in the company's ability to sell more online ads even as the United States slogs through its worst recession since World War II.

For the most part, Google has delivered. Its second-quarter profit rose 19 percent to $1.48 billion, or $4.66 per share -- the highest net income for any three-month period since Google went public five years ago.

Google pulled it off largely by making the first major cuts to its payroll, getting rid of employee freebies like bottled water and dramatically reducing its spending on data centers and other long-term projects.

The frugality has helped Google overcome its decelerating revenue growth during the past year. The pace slackened again in the second quarter as revenue rose just 3 percent to $5.52 billion.

It marked Google's second straight quarter of single-digit revenue growth, an unsettling trend at a company that hadn't fallen below a 30 percent gain until the final three months of last year.

"They are pulling more levers than they have had to in the past and that's a sign of a mature company," said Brigantine Advisors analyst Colin Gillis. "People don't like that because Google is supposed to be a growth company."

Because it runs the Internet's most widely used marketing channel, Google's lackluster revenue growth could foreshadow even more significant sluggishness among less profitable companies fueled by online advertising and e-commerce. Many of those companies, including Yahoo Inc., will detail their second quarter results in the coming weeks.

Although the U.S. recession has been making it increasingly difficult for Google to sell ads, Chief Executive Eric Schmidt said he doesn't expect the business climate to become any more challenging.

"We're not at the moment looking at that downward spiral that we thought we might see six months ago," Schmidt told analysts during a Thursday conference call. The remarks echoed comments made to reporters last week, when he said the recession had already appeared to hit bottom.

If not for stock compensation expenses, Google said it would have made $5.36 per share. That topped the average estimate of $5.09 per share among analysts polled by Thomson Reuters.

After subtracting ad commissions, Google's net revenue totaled $4.1 billion -- about $40 million above analyst estimates.

The revenue would have been about $375 million higher if the dollar hadn't strengthened during the past year, according to Patrick Pichette, Google's chief financial officer. Google's finances swing with currency fluctuations because 53 percent of the company's sales come from outside the United States.

With the recession and the dollar working against it, Google tightened its belt another notch to boost its profits. For instance, the company trimmed its general and administrative expenses by 23 percent to save about $110 million and reduced its spending on capital projects by 80 percent, or $559 million.

Gillis is worried Google's penny pinching may be one of the reasons that some of the company's services, including its e-mail, have been suffering outages more frequently in recent months.

But Pichette said in a Thursday interview that Google isn't skimping on technology. "We continue to fund everything we want to do," he said.

Google ended June with 19,786 employees, 378 fewer than at the end of March. Although relatively small, the reduction is still notable for company that added more than 17,000 workers from the start of 2005 through the end of last year. Pichette said Google is still hiring.