SAN FRANCISCO — The investors who have sent Google Inc.'s stock soaring since its initial public offering have been betting the company would continue its torrid growth. It turns out they've been very conservative.
Google on Thursday said its sales and profit more than doubled in the third quarter. The strong results, released in the first earnings report to follow the company's August IPO, put to rest any concerns about a slowdown in Google's core business, selling online ads targeted to Internet search results.
Net income for the Mountain View, Calif., company came in at $52 million, or 19 cents a share, compared with $20 million, or 8 cents, during the same period last year, when Google was still toiling away in financial secrecy.
Excluding certain items, Google earned 70 cents a share. The company had offered Wall Street no guidance on its performance, and analysts' expectations for the third quarter were all over the map. But the results blew past even the most bullish forecasts.
"Those guys cranked," said Mark Mahaney, an analyst with American Technology Research.
Revenue rose to $806 million from $394 million. About half of Google's revenue came from ads on Google.com and half came from placing ads on partners' websites. Excluding the "traffic acquisition costs" it pays to those partners, the company had sales of $503 million, well above the Wall Street consensus of $456 million.
Google took one-time charges in the quarter to account for a $201-million legal settlement with rival Yahoo Inc. over patent and stock-warrant disputes. And unlike most other technology companies, Google expenses the cost of stock options and grants to employees. Excluding those items, Google earned $193 million, or 70 cents a share, far outpacing the Wall Street consensus of 56 cents.
After rising $8.89 to $149.38 in regular Nasdaq trading, Google shares jumped an additional 8% to $161.30 in extended trading after the results were released.
Once again, investors will have to predict Google's future performance without much help from the company. As promised in Google's highly ideological IPO prospectus, Chief Executive Eric Schmidt began a conference call with analysts by declining to issue financial guidance. He said the company didn't want to get bogged down by pressure to meet quarterly expectations.
