Google's Net Income Climbs
Less Than Expected; Shares Tumble
By JAY MILLER
July 17, 2008 5:27 p.m.
Google Inc.'s second-quarter net income rose 35%, but the results disappointed
investors and shares fell nearly 10% in after-hours trading.
"Strong international growth as well as sustained traffic increases on Google's
Web properties propelled us to another strong quarter, despite a more
challenging economic environment, " said Chief Executive Eric Schmidt.
1
What to expect from other major companies -- including analyst forecasts for
profit and revenue -- as they report quarterly earnings
The search-engine giant reported net income of $1.25 billion, or $3.92 a share,
compared with $925.1 million, or $2.93 a share, a year earlier. Net income fell
from $1.31 billion, or $4.12 a share, in the first quarter.
Excluding stock-option costs, the company said per-share earnings were $4.63.
Revenue jumped 39% from a year earlier to $5.37 billion. Traffic-acquisition
costs totaled $1.47 billion. Revenue was up 3% from the first quarter.
A Thomson Reuters analyst survey projected earnings of $4.74 a share, excluding
stock-based compensation, on revenue of $3.87 billion, excluding
traffic-acquisition costs.
Google's U.S. paid clicks for the second quarter rose 19% from a year earlier,
but fell 1% from the first quarter.
Google's U.S. paid clicks for the first quarter grew 20% over the year ago
period, a sharp deceleration from the company's 30% growth rate in its 2007
fourth quarter and 45% growth in the 2007 third quarter. However, some analysts
have argued that the slower click growth is a result of steps Google has taken
to weed out less lucrative advertisers.
Despite the disappointing second-quarter report, Citigroup remains positive on
Google.
"Google's underlying fundamentals are intrinsically strong," analyst Mark
Mahaney wrote. "We'd be buyers on this pullback."
Mr. Mahaney noted that operating margin came in "modestly light" but that
Google showed strength in revenue from its partner sites and licensing.
One of the company's major efforts to grow advertising sales -- at YouTube -
has hit snags as some companies have been reluctant to advertise next to
amateur videos. Copyright litigation has also complicated matters.
Earlier this week, Google went to Washington in an effort to sell lawmakers on
its advertising partnership with Yahoo Inc. The deal, seen by many as a
lifeline for Yahoo as it fends off unwanted suitors, has faced antitrust
concerns. Microsoft Corp., one of those suitors, opposes the deal, saying it
would create a monopoly in search advertising.
There were signs that Google has slowed its spending: The company added 448
employees in the quarter – relatively low by Google standards – bringing its
total to 19,604.
In after-hours trading, the company's shares fell 9.9% to $479.70. The shares
ended the regular session at $532.15, down 0.6%.
___________________________________________________________________________
Yahoo! Toolbar kini dilengkapi dengan Search Assist. Download sekarang juga.
http://id.toolbar.yahoo.com/
