SAN FRANCISCO – Web search leader Google Inc. (GOOG) Thursday posted a quarterly profit nearly six times higher than a year earlier, blowing past Wall Street targets as search advertising continued to grow at a rapid clip.
The results sent shares of Google more than 6 percent higher in after-hours trade to $217.15 on the Inet electronic brokerage.
"On the surface they look fantastic," Chris Baggini, manager of the Gartmore Growth Fund, said of the results.
Google net income rose to $369.2 million, or $1.29 a share, in the first quarter, from $64.0 million, or 24 cents a share, a year earlier. Results from the most recent quarter included a $49 million charge related to stock-based compensation.
Total revenue rose to $1.26 billion from $651.6 million.
Wall Street analysts on average had expected net profit of 78 cents a share, and excluding some items the average target had been 92 cents, according to Reuters Estimates. Revenue had been seen at $1.16 billion.
Virtually all the company's revenue comes from ads that are triggered when Web users type certain key words into Google's search engine.
Google said income from operations rose to $443 million from $155 million, and its operating profit margin rose to 35.2 percent of revenue from 23.8 percent a year earlier.
"This improvement in operating margins was primarily due to decreases in both stock-based compensation expense and TAC (traffic acquisition costs (search)) as a percentage of revenue," Google said.
"It looks like growth in the company's traditional business continues to drive growth and profits at the company — and that leads to higher operating margins and more money on the bottom line," said Barry Randall, manager of the First American Technology Fund.
In regular Nasdaq (search) trade, shares of Google rose $6.12, or 3.1 percent, to $204.22.
Google Chief Executive Eric Schmidt said during a conference call with analysts that the company would not provide financial forecasts, which is in line with its policy.