Google beats analyst sales and earnings estimates
Google reported earnings today after the market closed, besting analysts' expectations for revenue and for earnings per share.
The search giant earned $2.5 billion on revenue (after traffic acquisition costs were removed) of $6.92 billion. Deducting the cost of covering employee stock, Google's earnings came in a $8.74 a share.
According to First Call, analysts had expected $7.86 for earnings per share on revenue of $6.55 billion.
In the year-ago period, Google earned $1.8 billion on revenue after traffic acquisition costs of $5.09 billion were removed.
Google chief executive Larry Page noted that revenue, including traffic acquisition costs, topped $9 billion, calling it a "great quarter," in a statement. And he was effusive about the company's latest project, the Google+ social network.
"I'm super excited about the amazing response to Google+ which lets you share just like in real life," Page said.
Google continues to see growth from outside the United States. For the quarter, international sales hit $4.87 billion, representing 54 percent of total revenue. That's up from 53 percent in the first quarter of 2011 and 52 percent in the year-ago period.
Google's operating expenses, other than cost of revenues, hit $2.97 billion in the quarter, or 33 percent of revenue, compared to $1.99 billion in the second quarter of 2010, or 29 percent of revenues. One driver for that increase was new hiring, which Page acknowledged on a conference call with analysts, was "a little ahead" of where the company expected to be. In the quarter, Google added 2,452 workers in addition to the 1,916 employees it put on the payroll in the first quarter. In total, the company now employs 28,768 workers.
Page said the pace of hiring came faster than expected because of the company's new compensation program, announced in the first quarter. But he noted that the company will have no problem putting those new employees to work.
"We're always looking for good people," Page said. "We can absorb those new hires and put them to use well."
Page offered new details on the company's Android operating system for mobile devices. The company is seeing roughtly 550,000 activations per day. It's being sold by more than 231 carriers in 123 countries. And there are more than 400 devices that run the operating system.
"Android is really on a tear," Page said. "The velocity is only increasing."
Surprisingly, Page was never asked about the various antitrust actions against the company. And the company offer no updates regarding those cases.
Page did go out of his way in his prepared remarks to address concerns that sometimes crop up among investors that Google is squandering money on project that might seem frivolous, such as its driver-less car system.
"It's easy to focus on things that are speculative," Page said. "We're very careful stewards of investors' money. We're not betting the farm on this stuff."
Later in the call, an analyst asked Page about how much he and the management team focus on the company's stock performance. Page said not much.
"We have a lot of stuff to do here," Page said. "One thing we can't control is the stock price."
Instead, the management team is focused on long-term growth and profitability.
Maybe so, but the stock soared in after-hours trading, climbing 12.6 percent to $595.80.
Editors' note: This story was corrected to reflect earnings per share after deducting employee stock costs.
Updated at 3:00 pm PT with more details and analysis.
Updated at 3:15 pm PT with more details from the conference call.