Google’s 30% Q3 profits boost beats analyst estimates


Google’s 30% Q3 profits boost beats analyst estimates

Warwick Ashford

Google has reported third quarter earnings per share of $7.64, a 30% increase on the same period the year before and above analyst estimates of between $6.69 and $7.10.

Revenues, mostly from Google's ad business, were up 25% to $5.48bn billion, above analyst estimates of $5.27 billion.

Google said the results prove the digital economy continues to grow rapidly, driving growth in the firm's core and newer businesses.

"We saw strength in every major product area in Q3. That is search, display, mobile, as well as apps and enterprise," said Patrick Pichette, Google's chief financial officer.

Although search advertising is still Google's main source of revenue, analysts said the company has shown a return on recent acquisitions to beef up its ability to sell image-based display ads, ads inside web videos and on mobile phones.

Google paid $3.2bn for DoubleClick, a display ad network, and $681m for mobile-ad firm AdMob, but display advertising accounted for nearly 10% of ad revenue in the quarter, and mobile advertising was almost 4%, executives said.

The better-than-expected results quashed fears Google would fail to keep costs down as it prepared to expand. The results boosted the Google's share price by around 9% in after-hours trade.

Although operating expenses rose 34% - boosted by hiring 1,500 new people and increased investment in sales and marketing, and R&D - other costs, as such the expense of running datacentres, rose at a more moderate rate, enabling the company to report a 23% increase in operating income to $2.55bn.

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