Google Inc. reported solid growth in revenue and profit Thursday
as the world's largest Internet search provider grappled with
falling advertising prices and kept a closer eye on expenses.
Google posted second-quarter net income of $3.93 billion, or
$6.43 per Class C share, up from $3.35 billion, or $4.88 per Class
C share, a year earlier. Excluding certain costs, the company had
earnings of $6.99 a share in the latest quarter; analysts had
projected earnings of $6.70 per share on that basis, according to
Thomson Reuters.
Revenue came in at $17.73 billion, up 11% from a year earlier.
Excluding traffic-acquisition costs, the revenue Google shares with
other companies that syndicate its search results, revenue totaled
$14.35 billion. Analysts forecast revenue excluding
traffic-acquisition costs of $14.27 billion.
Excluding currency fluctuations, Google said its second quarter
revenue would have improved 18%.
The company's new financial chief, Ruth Porat, who joined from
Morgan Stanley in May, said in prepared remarks Thursday that the
latest results reflected "continued growth across the breadth of
our products, most notably core search, where mobile stood out, as
well as YouTube and programmatic advertising."
Google has been spending billions of dollars on data centers,
real estate, acquisitions and research and development to support
its existing businesses and find new growth opportunities in
industries as disparate as energy, healthcare and
transportation.
Meanwhile, the company's growth rate has slowed and some
analysts and investors worry its main search advertising business
is struggling to adjust to the smaller screens of smartphones and
the rise of mobile apps, trends that have pressured its advertising
prices.
With new research initiatives yet to take up the growth mantle
from search, Google is paying more attention to costs after
expenses ballooned last year.
In the second quarter, Google reported total costs and expenses
of $12.9 billion, up 10% from a year ago. In the first quarter,
expenses grew 13% and in the fourth quarter of 2014, costs climbed
22%.
The company's headcount rose to 57,148 as of June 30, up from
48,584 a year ago.
The price of Google's ads, measured in cost per click, fell 11%
compared to a year earlier. That compares to a 7% year-over-year
decline in the first quarter.
Write to Alistair Barr at alistair.barr@wsj.com
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