Google beats forecasts as profits surge

Google comfortably beat analysts’ sales and earnings forecasts when its third quarter results were posted yesterday.

The world’s biggest search engine reported 32 per cent year-on-year growth in net income to $2.17bn (£1.37bn) and earnings per share, excluding one-time expenses of $7.64, up from $5.89 in third quarter 2009.

Net revenue for the three months to 30 September was $5.48bn, a 25 per cent jump from the third quarter of 2009. Analysts had forecast around $6.67 earnings per share and net revenues of $5.25bn.

Chief executive Eric Schmidt said it was “an excellent quarter”.

Google’s core business grew “very well” and its newer businesses, particularly display and mobile, “continued to show significant momentum”, he said.

Google’s overall revenues rose 23 per cent to $7.29bn as traffic-acquisition costs, the click-through commission payments from its partners, hit $1.81bn.

Both the frequency with which customers clicked on its search adverts and the average cost-per-click advertisers paid Google rose in the quarter.

The growth in net income for the search engine is particularly impressive as operating expenses rose 34 per cent at the company during the quarter and it added 1,500 new staff, to reach 23,331 employees.