Google's first-quarter profit surged to a nearly six-fold improvement as the online search-engine leader continued to surpass the bullish...

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SAN FRANCISCO — Google’s first-quarter profit surged to a nearly six-fold improvement as the online search-engine leader continued to surpass the bullish expectations for its high-flying stock.

The company said yesterday that it earned $369.2 million, or $1.29 per share, for the three months ended in March. That compared with net income of $64 million, or 24 cents per share, at the same time last year.

Revenue totaled $1.26 billion, nearly doubling from $651.6 million at the same time last year. After subtracting commissions that Google paid to other Web sites in its advertising network, revenue was $794.5 million.

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If not for a charge to account for stock options that Google awarded its workers before going public last August, the company’s earnings would have ranged between $1.39 to $1.46 per share.

By any measure, Google’s earnings easily topped the 92 cents per share forecast by analysts in a Thomson Financial survey.

“Outstanding is the only way to describe the results,” said Robert Lutts, chief investment officer at Cabot Money Management. “They have people all over the world clicking and paying.”

Google’s earnings have soared past analyst estimates in all three quarters since the company completed its much-anticipated initial public offering of stock eight months ago.

That IPO, priced at $85 per share, generated the most investor excitement since the dot-com boom, amplifying the pressure on Google to continue the rapid financial growth that helped make it a hot commodity in the first place.

Although Google management expressed little interest in pleasing Wall Street, the company’s stellar financial performance has been creating even more enthusiasm about its prospects.

“Google is an amazing place,” company CEO Eric Schmidt said during a interview yesterday. “I see no sign of things slowing down.

“People love to say that the current growth rate of the industry is going to decay in six to nine months,” Schmidt said. “I have learned that you cannot predict the impact of new technology.”

The company announced its latest quarterly results after the stock market closed yesterday. Google’s shares gained $6.12 to close at $204.22, then surged another $18.71 in extended trading.

If the stock reacts similarly when trading opens today, Google’s shares would climb to a new high, exceeding the $216.80 reached shortly after the company announced its earnings for the final quarter of 2004.

Google makes virtually all of its money from the text-based ads that are tied to online search requests.

The company gets paid each time one of the links are clicked upon on Google’s home page or hundreds of other sites that display the ads.

The text-based ads, which are priced using an online auction system, are becoming more expensive. Advertisers bid an average of $1.75 per click last month, a 6 percent increase from February, according to Fathom Online, a research firm.

The online advertising boom is enriching many Internet companies, but none are benefiting more than Google and Yahoo!, which operate the Web’s most popular search engines. Google is by far larger, processing 2.06 billion search requests last month compared with 907 million for Yahoo!, according to Nielsen/NetRatings, an Internet research firm.

The heavier search volume has helped make Google more profitable than Yahoo!, a slightly older company with twice as many employees. Yahoo! earned $204.6 million on revenue of $1.17 billion during its first quarter.

“There is a tidal wave taking place with Internet advertising,” said ThinkEquity Partners analyst John Tinker, who has a “buy” rating on Google. “It’s only going to accelerate.”

Google may have other advantages besides its larger market share.

Many analysts think Google has devised a better formula for deciding which ads are most closely related to a search request, resulting in more revenue-producing clicks.

Google also is making more money globally. The company generated 39 percent of its revenue overseas in the first quarter.

“I am particularly proud of our sound execution during this period of very rapid growth,” Schmidt told analysts during yesterday’s conference call.

“Tidal wave” quote and Schmidt’s “new technology” quote provided by Bloomberg News. “Clicking and paying” quote provided by Reuters.