Google earnings rise 36%, surging past estimate

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Google Inc. on Thursday posted 36% profit growth, handily surpassing most Wall Street expectations, fuelled by a significant increase in demand for its online advertising.

Shares of Google rose more than 10% in after-hours trading, following the company’s report, to $584.44.

Google said its second-quarter net income rose to $2.51 billion, or $7.68 a share, from $1.84 billion, or $5.71 a share in the same period last year. The Internet search giant said net revenue for the period ended June 30 was $6.92 billion. Excluding one-time items, Google said that earnings for the quarter were $8.74 a share.

Analysts expected Google to earn $7.84 a share, excluding items, and $6.54 billion in net revenue, according to an average of estimates culled by FactSet Research.

The so-called whisper number, an informal gauge of expectations among investors, was for a figure of $7.87 a share, according to WhisperNumber.com.

“We had a great quarter,” Chief Executive Larry Page said in a prepared statement. Google said that its paid clicks, or the number of times that Internet users click on the company’s advertising and generate revenue, rose roughly 18% compared to the same period last year — in line with, or slightly ahead of, most analysts’ expectations.

Meanwhile the prices paid for Google’s online advertising, or “cost per click,” rose about 12% in the quarter, the company said.

Operating expenses rose to $2.97 billion, Google said, compared to $1.99 billion in the quarter last year.

Google, which has been on a hiring binge, said that it added nearly 2,500 new employees in the second quarter, increasing its headcount to 28,768. Roughly 450 of the new employees came as a result of Google’s acquisition of ITA Software, the company said.

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