When Google commanded $85 per share in its August 2004 initial public offering, the prospect of the stock quadrupling in less than 15 months ago seemed inconceivable.
It doesn’t appear far-fetched now: Google’s shares hit a new all-time high early on Friday, rising by $36,69, or 12%, to $339,89 in morning New York Stock Exchange trading after the internet search juggernaut announced third-quarter financial figures that astounded even the most bullish analysts, as well as it own management team.
”We surprised ourselves this quarter,” Google CEO Eric Schmidt said on Thursday. ”Business was much stronger than I expected.”
Google, which reported its results after financial markets closed on Thursday, said it earned $381,2-million, or $1,32 per share, a more-than-sevenfold increase from net income of $52-million, or 19 cents per share, a year ago. Last year’s results included a $201-million charge to account for a legal settlement with rival Yahoo!.
If not for charges related to a recent acquisition and employee stock options issued before the company went public 14 months ago, Google said it would have earned $1,51 per share.
That figure easily exceeded the consensus estimate of $1,36 per share among 31 analysts surveyed by Thomson Financial. The highest analyst estimate had been $1,46 per share.
Google’s revenue for the quarter totalled $1,58-billion, nearly doubling from $805,9-million last year. After subtracting the commissions that Google paid to other websites in its advertising network, the revenue stood at $1,05-billion, exceeding the Wall Street estimate of $944-million.
”They are crushing” all expectations, said American Technology Research analyst David Edwards. ”They have an incredibly efficient business model.”
The most recent profit — the highest for any three-month period since Google’s inception seven years ago — came during a typically slow season for internet companies because people spend less time at their computers during the summer.
But the introduction of new products, such as instant messaging, and upgrades to existing services, such as mapping, helped Google attract more summer traffic than anticipated, executives said. — Sapa-AP