Google Inc (GOOG) Q2 Earnings Top Street Estimates; Shares Jump

Google Sydney

The shares of Google Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) surged after-hours on Thursday after reporting earnings for the second quarter that exceeded the estimates of Wall Street analysts.

The stock price of Google’s Class A shares (GOOGL) closed $601.78 a piece, up by 3 % on Thursday. The stock increased further by more than 12% to $675.73 per share after-hours.

On the other hand, Google’s Class C shares (GOOG) closed $579.85 a piece, up by 3.5%. The stock climbed further by more than 11% to $644.94 per share during the extended hours trading.

Google second quarter results

During the second quarter, Google achieved non-GAAP earnings of $6.99 per share, higher than the $6.70 per share estimated by analysts based on data compiled by FactSet.

The search engine giants’ total revenues were $17.7 billion, in line with the expectation of Wall Street analysts. Google websites achieved $12.4 billion revenues, Google network Members’ websites delivered $3.6 billion revenues, and other revenues were $1.7 billion.

Google reported that its aggregate paid clicks increased 18% year-over-year. The paid clicks on Google websites increased 30% while the paid clicks in Google Network Members’ websites declined 9%.

The search engine giants’ total cost-per-click dropped 11%, cost per click on Google websites declined 16% and cost-per-click in Google Network members’ website slid 3%.

Google reported that its operating expenses (other than cost of revenues) were $6.31 billion during the second quarter compared with $5.58 billion in the same period a year ago. Its capital expenditures declined from $2.64 billion last year to $2.51 billion.

Google ended the quarter with $69.78 billion cash, cash equivalents and marketable securities. The company’s free cash flow increased from $2.98 billion to $4.47 billion.

Google is focused on developing big opportunities, revenue growth

In a statement, Google CFO Ruth Porat said, “Our strong Q2 results reflect continued growth across the breadth of our products, most notably core search, where mobile stood out, as well as YouTube and programmatic advertising. We are focused every day on developing big new opportunities across a wide range of businesses. We will do so with great care regarding resource allocation.”

During the company’s conference call, Porat also said, “The priority is revenue growth. We have a breadth of opportunity, but pursuing revenue growth is obviously not inconsistent with expense management.”

Meanwhile, BGC Partners analyst, Colin Gillis told CNBC, “I think absolutely, this is just the beginning of what could be a very good move for Google.” He added that Porat’s ability to control cost would a catalyst for the company this year.