World Business

Google's Q2 earnings rise 24%, but miss target

(Agencies)
Updated: 2010-07-16 11:51

Google, which is based in Mountain View, earned $1.84 billion, or $5.71 per share, in the April-June period, up 24 percent from $1.48 billion, or $4.66 per share, a year ago.

If not for expenses covering employee stock compensation, Google said it would have made $6.45 per share. That figure was below the average estimate of $6.52 per share among analysts polled by Thomson Reuters.

Revenue climbed 24 percent to $6.82 billion, from $5.52 billion a year earlier. After subtracting commissions paid to its ad partners, Google's revenue stood at $5.09 billion -- about $10 million above analyst projections.

In another key figure watched closely by investors, the number of revenue-generating clicks on Google's ads in the second quarter increased 15 percent from the same time last year. The gain is in the same range as the increases in the past year.

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The average price per ad click in the second quarter edged up 4 percent from last year, but it's slower than the growth seen during the previous two quarters.

After clamping down on its costs most of last year, Google has been spending more freely because management believes the US economy is steadily rebounding, with electronic commerce and the rest of the technology sector leading the charge.

Google has brought in nearly 2,000 employees during the first half of this year, through both recruitment and a flurry of mostly small acquisitions. The company's spending on data centers and other projects known as capital expenditures totaled $476 million, more than tripling from the same time last year.

Pichette said the company plans to continue investing in more employees and technology as it tries to position itself to take advantage of an improving economy.

To help pay for its ambitions, Google said Thursday that it will take on significant debt for the first time in its six years as a public company, even though it has $30 billion in cash. The company's board of directors approved a plan to borrow up to $3 billion on the premise that the returns on Google's investments will be higher than its borrowing costs.