Google reports strong earnings, propelling its stock

Growth in the company's revenue, however, has slowed in recent years

Inside Google's headquarters in Mountain View, California.

Inside Google's headquarters in Mountain View, California.

Google's stock jumped more than 7 percent in the after-market hours on Thursday, after the company reported strong earnings results for the second quarter.

Total income for the period ended June 30 was $US3.93 billion, up 17 per cent from $US3.35 billion in the second quarter of 2014, Google announced Thursday. Excluding certain expenses, Google reported earnings of $US6.99, beating analysts' estimates of $US6.71, as polled by the Thomson Financial Network.

The company's stock was trading at around $US620 after Google reported its earnings at the end of trading, up from closing at $US579.

Still, Google's growth has been slowing.

Advances in the Internet giant's crucial advertising sales have taken a hit the last few quarters. Revenue is still growing, but at a slower rate than in years past, as the company has made new investments in ambitious "moon shot" projects like self-driving cars and Internet balloons in the stratosphere.

The company's sales for the second quarter were $US17.73 billion, up 11 per cent, and coming in just shy of analysts' estimates of $US17.75 billion.

But the 11 per cent growth rate is the smallest revenue increase reported by the company since 2012.

The company reported mixed results in its ads business. Its paid clicks grew by 18 per cent, but the cost-per-click paid by advertisers fell by 11 per cent.

The company's operating expenses, meanwhile, grew by 13 per cent, to $US6.32 billion.

One concern among investors is that Google is struggling to grow its ad revenue on mobile devices. In comparison to the desktop, ads in mobile search results are smaller, and can yield fewer interactions from users, driving down their price.

Google has tried to attract more users to its ads on mobile by adding more information and functionality to them, like product ratings and store inventory information. Just this week, the company said it was rolling out a new way to let users make purchases directly from the ads in mobile search results.

Google is also competing with a rising number of apps made by other developers built around specific types of searches or online activities. In April, Google made a change to its search algorithm that prioritized sites that had been optimised for mobile. By prioritising higher quality sites, the effect, dubbed "Mobilegeddon," was aimed at getting more people to use Google search on mobile.

Google doesn't break out it's desktop versus mobile advertising sales. But Google might be making new strides in mobile. In its announcement , CFO Ruth Porat said mobile "stood out" in the context of the company's core search results.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuesadvertisingGooglefinancial resultsmobileinternetsearch engines

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Zach Miners

IDG News Service
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?