The 36 percent revenue surge of Google Inc. has smashed expectations of the Wall Street and eclipsed concerns about mounting expenses, sending the Internet giant’s shares up more than 12 percent.
Google shares were up 12.3 percent at $594.50 in after-market trading, or just a whisker above levels at which the stock began 2011.
“Google should be viewed as a growth company again this quarter,” said Stifel Nicolaus analyst Jordan Rohan. “The combination of mobile search, Android, ad exchange, YouTube, and the core search businesses, they’re all doing well. Google is no longer a one trick pony.”
“The number to focus on is really the GAAP earnings number. Google spent aggressively, hiring just as many people this quarter as the did last quarter.”
Investors had feared Google’s ever-increasing spending would eat into margins. Operating expenses leapt 49 percent to $2.97 billion in the second quarter, to about a third of revenue.
Analysts said the big increase in sales more than compensated for the rise in costs, but Google might find it increasingly difficult to shore up margins while it continues to hire, acquire and invest.
“Revenue growth overrides the hiring and the expense issues,” BGC Partners analyst Colin Gillis said in response to the share price jump.
“We’re still in the very early stages of what we want to do,” CEO Larry Page said. “Our emerging … products can generate huge new businesses for Google in the long run, just like search. And we have tons of experience monetizing products over time.”
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