501.50: Google's fourth quarter profit nearly tripled to beat analysts' expectations, as the Mountain View-based company continued to expand its lead in the online search market over rivals such as Yahoo! (YHOO) and Microsoft (MSFT). Despite the strong growth, however, investors were expecting more. Shares of the company traded lower on the results, losing about 2% in pre-market activity.
For the fourth quarter, Google posted net income of $1.03 billion, or $3.29 per share, up from $372.2 million, or $1.22 per share, in the year-ago period. Excluding stock-based compensation and other one-time charges, the company would have earned $3.18 per share. That figure easily surpassed analysts' expectations of $2.91 per share, according to Reuters Estimates.
Revenue at the company rose 67% year/year to $3.21 billion, driven by continued strength from its advertising networks and partners. That was roughly in line with the consensus estimate of $3.14 billion. After subtracting traffic acquisition costs, or the commissions paid to advertising partners, revenue totaled $2.23 billion. Google-owned sites generated revenues of $1.98 billion, or about 62% of total revenues, and paid clicks increased 61% year/year.
While some investors were expecting more of an upside surprise on the top line, pressuring shares lower, we believe 67% revenue growth is still impressive for a company that generates more than $10 billion a year and continues to gain market share in the search sector and is expanding into a number of new markets. As such, we would be buying shares of the company on any pull-back.
(Disclosure: Briefing.com has a business relationship with Google and Yahoo!)
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