Chicago Tribune - - MOUNTAIN VIEW, Calif. -- Google Inc. said Thursday that third-quarter profit almost doubled as the company beat Wall Street estimates by 20 cents a share.
Net income rose 92 percent, to $733.4 million, or $2.36 a share, from $381.2 million, or $1.32 a share, a year earlier. Profit excluding stock-based compensation costs was $2.62 a share. Analysts were expecting $2.42 a share.
Revenue surged 70 percent, to $2.69 billion. Subtracting the commissions paid to Google's ad partners reduced revenue to $1.86 billion. That topped estimates by about $50 million.
"Their numbers just continue to astound Wall Street," said Barry Ritholtz, chief investment officer of Ritholtz Capital Partners in New York. "They're not sitting back and just getting fat and lazy."
Google continued to tighten its grip on the online ad market. In September, Google held a 45 percent share of the U.S. search market, up from 44 percent in August, according to ComScore Media Metrix. No. 2 Yahoo Inc.'s search share dipped to 28 percent in September from 29 percent the month before.
Google stuck to its policy of not forecasting earnings, a practice the company says is designed to prevent managing earnings to meet estimates.
Excluding revenue passed on to Web partners, Google's ad sales probably will climb 65 percent this year, to $4.03 billion, equaling 25 percent of the total online advertising market, researcher EMarketer Inc. said this week.
Buying YouTube Inc. is part of Google's plan to bolster that growth. The market for video advertising is the fastest-growing segment of online ads.
"Search is only half of the online-advertising pie," said Jefferies & Co. analyst Youssef Squali. "They are certainly moving into the other half."
Google's report contrasts with that of Yahoo, which said Tuesday that third-quarter sales growth was the slowest in four years.
"Pretty much everything that's hurting Yahoo at this point is due to the fact that Google is executing quite well," said Barry Randall at MTB Investment Advisors in Baltimore. "They're taking share from virtually everyone else in the search space."
The report came out after the close of trading. Google shares closed the regular Nasdaq stock market session at $426.06, up $6.75, but jumped nearly $30, or 7 percent, in after-hours trading.