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Google Rocks Q2 Earnings
Google continued its redemption path after 2005's year-end earnings miss by exceeding analyst expectations for a second straight quarter. "Exceed" is a mild term. A $2.46 billion quarter is a bit beyond "exceed."
Google's revenues represent a 9 percent increase over Q1's gangbuster $2.25 billion pull-in, and a 77% increase over Q2 2005. Net income was $721 million, or $2.33 per share, up from $592 million in Q1. Google-owned sites generated revenues of $1.43 billion, or 58% of total revenues, representing a 94% increase over Q2 2005.
"Google grew at an impressive pace during a seasonally slower quarter," said CEO Eric Schmidt. "We continue to deliver valuable new products and services to users around the world through our partnerships and investments in our business. Our strong performance results from our clear focus on increasing the quality of user experience, particularly in search and ads."
AdSense alone brought in $997 million for the search advertising company, comprising 41% of total revenues. This is a 58% increase over network revenues of $630 million generated in the second quarter of 2005 and a 7% increase over first quarter 2006 revenues of $928 million. Forty-two percent of total revenues came from outside the U.S.
Google says that it expects the growth rate in capital expenditures for the year to be "substantially" greater than the revenue growth rate, due to major investments in IT infrastructure. Google's IT infrastructure wish list includes expansions of servers, networking equipment, data centers, real estate and campus facilities.
That leaves Google sitting on about $9.82 billion in cash, which includes over $2 billion raised from the public offering of stock that closed from April and $1 billion in debits due to the cash investment in AOL in the same month.
On a worldwide basis, Google employed 7,942 full-time employees as of June 30, 2006, up from 6,790 full time employees as of March 31, 2006.
At the close of trading on Thursday, Google shares were down $11.88. Upon the earnings report, GOOG has risen $6.85.
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About the Author:
Jason L. Miller is a staff writer for WebProNews covering technology and business.
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Jason Lee Miller
