MOUNTAIN VIEW (dpa-AFX) - Internet giant Google Inc. (GOOG) said Thursday after the markets closed that its third quarter profit rose 26%, helped by strong demand for its search advertising. The company's quarterly earnings per share, excluding items, also breezed past Wall Street expectations as did its quarterly revenue.
The Mountain View, California-based company reported net income for the third quarter of $2.73 billion or $8.33 per share, compared to $2.17 billion or $6.72 per share for the year-ago quarter.
Excluding items, adjusted net income for the third quarter was $3.18 billion or $9.72 per share, compared to $2.46 billion or $7.64 per share in the prior year quarter.
On average, 32 analysts polled by Thomson Reuters expected the company to earn $8.74 per share for the third quarter. Analysts' estimates typically exclude special items.
Operating income for the third quarter was $3.06 billion, or 31% of revenues, compared to $2.55 billion, or 35% of revenues, in the third quarter of last year.
On adjusted basis, operating income rose to $3.63 billion, or 37% of revenues from $2.93 billion, or 40% of revenues a year earlier.
Google, owner of Internet's most popular search engine, said revenues for the third quarter rose 33% to $9.72 billion from $7.29 billion in the same quarter last year.
Excluding Traffic Acquisition Costs, the portion of revenues shared with Google's partners, third quarter revenues surged 37% to $7.51 billion from $5.48 billion a year ago. Twenty-seven analysts had a consensus revenue estimate of $7.21 billion for the third quarter.
Total advertising revenues for the third quarter rose 33% to $9.34 billion from $7.03 billion in the year-ago quarter.
Revenues from Google-owned sites were up by 39% to $6.74 billion in the third quarter, while Google's partner sites generated revenues, through AdSense programs, of $2.60 billion, representing an 18% increase from the third quarter of last year.
Third quarter revenues from outside of the United States were $4.87 billion, representing 55% of total revenues in the quarter, compared to 52% in the year-ago quarter.
Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of the company's AdSense partners, increased about 28% over the third quarter of 2010.
Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of AdSense partners, increased about 5% from last year.
Google ended the third quarter with cash, cash equivalents, and short-term marketable securities of $42.6 billion, compared to $39.1 billion at the end of the previous quarter.
Last month, Google opened its social networking site Google+ to the public, adding nine new features, as part of its efforts to challenge Facebook. Google+ was launched in June as an invitation-only network. The company's CEO Larry Page said Thursday that Google+ has just passed the 40 million user mark.
In mid-August, Google announced a deal to buy Motorola Mobility Holdings Inc. (MMI) for $12.5 billion to supercharge the entire Android ecosystem. The proposed deal was seen as a shot in the arm for Google after it lost out on the deal to acquire the 6,000 patents of Nortel Networks Corp. (NRTLQ.OB). A consortium including Apple Inc. (AAPL), Microsoft Corp. (MSFT), Research In Motion (RIM, RIM.TO), and Sony Corp. (SNE), among others snapped the deal for $4.5 billion, eliminating Google's modest $900 million offer.
Motorola Mobility has one of the strongest patent portfolios in the industry with over 17,000 patents and 7,500 pending.
Google's arch rival Yahoo! Inc. (YHOO) will report earnings on October 18. Of late, Yahoo has become a takeover target and a subject of bid speculations after the Sunnyvale, California-based company last month fired its chief executive officer Carol Bartz, and embarked on a strategic review to position the company for future growth.
KKR & Co. (KKR) and Blackstone Group LP (BX) are among the private-equity firms considering possible bids for Yahoo, Bloomberg reported earlier Thursday, citing people with knowledge of the matter.
Last week, a Reuters report said that software giant Microsoft Corp. (MSFT) might be considering a new buyout offer for the troubled Internet company, citing unnamed sources close to the situation.
Google shares, which have traded in a range of $473.02 to $642.96 over the past year, closed Thursday's regular trading session at $558.99, up $10.49 or 1.91%. The stock is currently gaining $34.26 or 6.13% in after hours trading.
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