Google Inc’s quarterly results beat Wall Street’s expectations as the Internet search giant expanded its mobile business while keeping ad-rate slides in check.
It also offset deepening losses from Motorola.
Shares of Google rose 6 percent to $941.25 in after-hours trading on Thursday after it reported a 23 percent rise in revenue from its Internet business, excluding fees paid to partners, of $10.8 billion in the third quarter.
“They were able to grow their revenue pretty substantially, particularly in their own websites, in spite of having lower overall ad prices,” said JMP Securities analyst Ronald Josey.
Google’s business, like rivals Facebook Inc and Yahoo Inc, has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where advertising rates are lower than on PCs.
Paid clicks increased 26 percent year-on-year during the three months ended Sept. 30, while the average cost-per-click – the price that marketers pay Google when consumers click on their ads – decreased 8 percent.
“That’s the key story, their ad volume growth is outpacing the decline in cost-per-clicks,” Josey said.
On Thursday, co-founder and CEO Larry Page told analysts he will no longer be joining the company’s regular earnings conference call. He did not give a reason.
Page, who with Sergey Brin conceived of what is today the world’s most-used Internet search engine, is not known for assiduously courting Wall Street investors. And this year, Page revealed that his vocal cords are partially paralyzed as the result of a rare medical condition.
BOTTOM LINE BEAT
In terms of quarterly results, Google also managed to handily beat Wall Street’s expectations.
It earned $2.97 billion, or $8.75 per share in the three months ended Sept. 30, compared to $2.18 billion, or $6.53 per share, last year.
Excluding certain items, Google said it earned $10.74 per share, compared to the $10.34 that analysts were expecting, according to Thomson Reuters I/B/E/S.
Google’s consolidated revenue of $14.89 billion compared with the $14.79 billion average analyst estimate.
Operating loss at Motorola, Google’s mobile phone business, totaled $248 million during the third quarter, compared to a loss of $192 million in the third quarter of 2012.