Blog Post

Google’s Big Profit Jump Doesn’t Meet Expectations

Google (NSDQ: GOOG) once again posted double-digit jumps in revenue and profits during the second quarter, as it benefited from a very robust search-ad market. Net revenue was up 25 percent to $5.09 billion, from $4.07 billion during the same period a year ago, while EPS increased to $6.45 from $5.36. While the sales figure came in ahead of expectations, the earnings per share figure was short, as Google ramped up its spending more than expected during the quarter.

Google had said it would be boosting spending significantly this fiscal year and it’s very much doing so, spending heavily on employees and capital expenditures. The company reported capital expenditures of $476 million during the quarter, compared to $239 million last quarter, a jump that was much more than analysts had anticipated.

Google’s workforce also grew for the third quarter in a row. The company said it had 21,805 employees, up nearly 6 percent compared to last quarter.

As for revenue, Google posted solid growth in paid clicks and cost-per-click. Paid clicks were up 15 percent, compared to the same period a year ago, while the average cost-per-click was up about four percent.

Overall, Google said the revenue generated from its sites was up 23 percent to $4.5 billion, while revenue brought in through AdSense was up 23 percent to $1.68 billion.