By Chelsey Dulaney
Google Inc. shares crossed $700 for the first time ever Friday,
before settling short of that mark, after the search giant reported
strong results for its second quarter.
Class A shares hit a high of $703 in midday trading, up $101.22,
or 17%, from its close Thursday. The mark easily topped the stock's
previous high of $615.03 in February 2014. Before Friday, the stock
had gained 13% in 2015.
After hitting the high, shares retreated a bit and eventually
closed at $699.62. Still, the stock's gain of $97.84 Friday added
nearly $67 billion to the company's market value, which is now
about $478 billion, according to FactSet.
The surge follows Google's quarterly report that handily beat
Wall Street expectations after the bell Thursday. Analysts were
particularly cheered by Google's stronger-than-expected revenue
growth and tighter controls on costs.
In a research note, Nomura analysts said Thursday's results help
allay some concerns surrounding Google, such as that its desktop
search is declining and expense growth is outpacing revenue
increases.
Excluding currency fluctuations, revenue rose 18% from a year
earlier, compared with 17% growth in the first quarter. Google
attributed growth to strength in its core search business, mobile
and YouTube.
Meanwhile, second-quarter operating expenses, which include
research and development as well as sales and marketing costs,
totaled $6.4 billion, down slightly from the first quarter.
"Google hasn't delivered a quarter like this in a long time,"
J.P. Morgan analyst Doug Anmuth said in a note.
The company's new financial chief, Ruth Porat, hinted on
Thursday that Google, which has never repurchased stock or paid a
dividend, might distribute some of its cash to shareholders. She
suggested Google could issue debt to finance the program, or for
acquisitions and other investments.
Some analysts and investors have expressed concern that Google's
main search-advertising business is vulnerable to the smaller
screens of smartphones and the rise of mobile apps, trends that
have pressured its advertising prices. The price of Google's mobile
search ads is still lower than those on personal computers, but Ms.
Porat said that gap is narrowing.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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