When Google Inc commanded US$85 per share in its initial public offering August last year, the prospect of the stock quadrupling in less than 15 months ago seemed inconceivable. It doesn't appear far-fetched now.
The Internet search juggernaut provided another boost to its high-flying stock Thursday by announcing third-quarter financial figures that astounded even the most bullish analysts, as well as it own management team.
"We surprised ourselves this quarter," Google CEO Eric Schmidt said during a Thursday interview. "Business was much stronger than I expected."
Google earned US$381.2 million, or US$1.32 per share, a more than sevenfold increase from net income of US$52 million, or US$0.19 per share, a year ago. Last year's results included a US$201 million charge to account for a legal settlement with rival Yahoo Inc.
If not for charges related to a recent acquisition and employee stock options issued before the company went public 14 months ago, Google said it would have earned US$1.51 per share.
That figure easily exceeded the consensus estimate of US$1.36 per share among 31 analysts surveyed by Thomson Financial. The highest analyst estimate had been US$1.46 per share.
Google's revenue for the quarter totaled US$1.58 billion, nearly doubling from US$805.9 million last year.
After subtracting the commissions that Google paid to other Web sites in its advertising network, the revenue stood at US$1.05 billion, exceeding the Wall Street estimate of US$944 million.
Google shares soared nearly 11 percent, or US$32.55, in extended trading Thursday to US$335.75. Based on that enthusiastic reaction, Google's shares could easily eclipse their all-time high of US$321.28 yesterday.
"They are crushing" all expectations, said American Technology Research analyst David Edwards. "They have an incredibly efficient business model."
The most recent profit -- the highest for any three-month period since Google's inception seven years ago -- came during a typically slow season for Internet companies because people spend less time at their computers during the summer.
Google executives also had warned that it might be difficult for the company to post substantial increases from last year's third quarter when a flood of publicity devoted to its initial public offering in August last year helped drive more traffic to its Web site.
But the introduction of new products, such as instant messaging, and upgrades to existing services, such as mapping, helped Google attract more summer traffic than anticipated, executives said during a Thursday conference call.
Even as the company diversifies, Google's online search engine remains the company's moneymaking hub, shrugging off stiffening competition from its biggest rivals, Yahoo Inc and Microsoft Corp.
Google handled 45 percent of US search requests last month, outdistancing 23 percent for Yahoo and 12 percent for Microsoft's MSN, according to research released on Thursday by Nielsen/NetRatings.
In its quest for more profit, Google wants to build a free high-speed wireless Internet access service in San Francisco to ensure more people in that city can connect to its search engine and, theoretically, click on its ads.
If San Francisco picks Google's proposal over 25 others, the company plans to begin building the wireless network immediately, Schmidt said.
Google also has teamed up with Comcast Corp., the nation's largest cable company, to explore buying a minority stake in Time Warner Inc.'s AOL. Yahoo and Microsoft also are stalking AOL, an alliance that would hurt Google because AOL is its biggest advertising partner.
Schmidt deflected analyst questions about the AOL courtship during Thursday's conference call.
"They are a very, very valued partner and we hope it will be true forever," he said.
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