Google stock surges on profit, revenue gains (Update)

Oct 17, 2013 by Glenn Chapman
Google headquarters in Mountain View, California, on April 7, 2011

Google shares surged to a record high, close to $1,000, after quarterly earnings figures showed the Internet giant's profits are climbing despite a trend toward cheaper advertising on smartphones and tablets.

The company on Thursday reported net income of $2.97 billion on revenue that rose to $14.89 billion in the quarter that ended on September 30.

Profits were up 36 percent from the same period a year ago and topped expectations. Revenues also beat forecasts with a 12 percent jump year-on-year.

The California titan's stock leapt more than eight percent, hitting $961.48 a share in after-hours trade.

"We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device," Google chief Larry Page said.

Google's main money-maker, search advertising, remained strong while revenue from areas such as the online Play shop for apps, music, books and other digital content was on the rise, according to executives.

The company also said sales of hardware such as Chrome and Nexus devices were adding to its revenue stream along with services tailored for businesses.

"They pretty much are golden," independent Silicon Valley analyst Rob Enderle said of Google. "They are almost invulnerable."

Google is so dominant in the booming online advertising market that it seems only governmental interference could derail its momentum, according to the analyst.

"Yahoo can't hurt them; Facebook can't hurt them. Twitter can't hurt them," Enderle said. "Microsoft is trying."

And, while prices paid for advertising were dropping due to a shift to cheaper mobile ads, more people were "clicking" on marketing messages in moves that resulted in revenue for Google, the earnings report showed.

"When you look across the company, it is amazing how all the teams are executing," Page said during an earnings call with analysts.

Mobile ads are proving their worth by triggering actions such as phone calls to businesses or shopping visits to real-world stores, according to Google chief business officer Nikesh Arora.

And there is "great progress" with Enhanced Campaigns for marketers to synchronize advertising across various devices people use to access the Internet, he said.

Revenue at YouTube is also benefiting from a growing trend of online video viewing and a desire by advertisers to reach audiences at the globally popular online venue.

Google reported that about eight percent of its revenue in the recently-ended quarter was from handset maker Motorola Mobile in a drop from what the Google-owned operation took in during the same period last year. The unit recorded an operating loss of $248 million in the past quarter.

Motorola recently launched a well-received Moto X smartphone and is ramping up marketing of the handsets.

The Android-powered phone is the first Motorola smartphone created in collaboration with Google since the Internet titan completed its $12.5-billion purchase of Motorola Mobility early last year.

Moto X smartphones are powered by Google's Android software and features include sophisticated voice controls and anticipating what users might want from the Internet at any given moment.

"We have made tremendous progress on voice recognition," Page said of spoken command features woven into Google products and services.

"The accuracy has caught up quite a bit; it is superfast."

Page, however, told analysts that they wouldn't be hearing his voice as often on quarterly earnings calls, as he would be letting Arora and chief financial officer Patrick Pichette handle most of those from now on.

"Going forward, I won't be joining every earnings call," Page said.

"I know you would all love to have me on, but you are also depending on me to ruthlessly prioritize my time for the good of the business."

Page said he remained devoted to investing in big innovations such as the self-driving car being refined in a Google lab devoted to disruptive new technology.

But Google won't be selling the cars any time soon. "It is still a long ways from being a commercial product," Page said.

gc/adm

Explore further: Why the Sony hack isn't big news in Japan

add to favorites email to friend print save as pdf

Related Stories

Facebook beats profit forecasts, revenue rises

Jul 24, 2013

Facebook surprised Wall Street with stronger-than-expected earnings for the second quarter Wednesday on a sharp rise in revenues, sparking a 16 percent jump in its share price in after-hours trade.

EBay CEO cites 'uncertainty' for weak 4Q outlook

Oct 17, 2013

EBay said the growth rate of e-commerce in the United States is slowing as it delivered a weaker than expected profit and revenue outlook for the current quarter through December. The company's third-quarter earnings edged ...

Recommended for you

Why the Sony hack isn't big news in Japan

11 hours ago

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

16 hours ago

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

17 hours ago

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

2012 movie massacre hung over 'Interview' decision

Dec 19, 2014

When a group claiming credit for the hacking of Sony Pictures Entertainment threated violence against theaters showing "The Interview" earlier this week, the fate of the movie's big-screen life was all but ...

Clooney slams skittish Hollywood after Sony hack

Dec 19, 2014

Film star George Clooney slammed the Hollywood movie industry for failing to stand up against the cyber threats that prompted Sony Pictures to cancel release of the movie "The Interview."

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.