Google Inc’s quarterly profit topped expectations, helped by cost controls, but chief executive Eric Schmidt said the economic environment remained tough with Internet users still searching but buying less.
Shares of the No. 1 US Internet search company initially rose 5 percent on the stronger-than-expected results, but then erased gains to trade flat after hours.
“We’re still basically in uncharted territory,” Schmidt said on a conference call. “Google is absolutely feeling the impact. Users are still searching but they’re buying less. Ultimately, what that really means is the ads are converting less.”
Compared with other Internet and media companies that depend on advertising revenue, Google has been extremely resilient to the economic downturn, though its revenue growth has slowed sharply from the heady 50 percent rates it used to enjoy.
Google reported first-quarter revenue of US$5.51 billion, up 6 percent from the first quarter last year, but down 3 percent from the fourth quarter — its first ever sequential decline. The figure was in line with average Wall Street expectations.
Martin Pyykkonen, senior analyst at Wunderlich Securities, said: “In one sense, revenue was certainly not robust, but considering the environment people are obviously taking that as somewhat of a comfort that it wasn’t any worse.”
“Tougher times but better discipline within the company on the cost management side [meant] that they were still able to come in and beat the bottom line pretty nicely by a few percentage points,” Pyykkonen said.
Net profit for the quarter that ended on March 31 was US$1.42 billion, or US$4.49 a share, up from US$1.31 billion, or US$4.12 a share, a year earlier.
Excluding special items, Google earned US$5.16 a share, ahead of the average Wall Street forecast of US$4.93, Reuters Estimates showed. The figure also beat the “whisper number” of US$5 per share that some analysts and investors were expecting.
Google executives said lower labor costs, as the company reset performance-based bonuses for the new year, kept expenses in line. And after several years in which Google expanded its workforce, the company’s headcount declined slightly in the first quarter to 20,164 employees worldwide.
Google announced three rounds of layoffs in the first quarter, although the 200 sales and marketing job cuts announced last month were not reflected in the latest headcount.
Separately, Google’s YouTube said it had signed a deal with Sony Corp to add the company’s films and TV shows to the video-sharing site and that it was talking with other big studios.
Schmidt said Google did not have any intention of changing its “conservative view towards cash management,” in a sign that a major acquisition may not be on the horizon.
However, Schmidt said Google would be happy to pursue an advertising partnership with companies like Twitter, the microblogging site that is often cited as a possible acquisition target for the Internet search giant.
Google also said it expected to continue to make significant capital expenditures, but did not provide financial forecasts, following its custom.
RESTAURANT POISONING? Deputy Minister of Health and Welfare Victor Wang at a press conference last night said this was the first time bongkrekic acid was detected in Taiwan An autopsy discovered bongkrekic acid in a specimen collected from a person who died from food poisoning after dining at the Malaysian restaurant chain Polam Kopitiam, the Ministry of Health and Welfare said at a news conference last night. It was the first time bongkrekic acid was detected in Taiwan, Deputy Minister of Health and Welfare Victor Wang (王必勝) said. The testing conducted by forensic specialists at National Taiwan University was facilitated after a hospital voluntarily offered standard samples it had in stock that are required to test for bongkrekic acid, he said. Wang told the news conference that testing would continue despite
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)