Ad Revenue Growth Helps Google's Second-Quarter Profit Trump Estimates

Technology Reuters

Google Inc's posted a better-than-expected quarterly profit for the first time in the last six quarters, helped by strong growth in advertising revenue.

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The company's shares rose 7.5 percent in after-market trading on Thursday.

Advertising revenue rose 11 percent to $16.02 billion in the second quarter ended June 30 from a year earlier, while the number of ads, or paid clicks, rose 18 percent, the company said.

Advertisers pay Google only if a user clicks on one of their ads. "Cost per click", or the average price of online ads, fell 11 percent in the quarter, but was more than offset by the increase in ad volumes.

Google's ad revenue has been under pressure from consumers accessing its online services on mobiles devices such as smartphones and tablets, where ad rates are typically lower.

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The company's consolidated revenue rose 11 percent to $17.73 billion in the quarter. (http://bit.ly/1CGbMq5)

Net income rose to $3.93 billion, or $4.93 per Class A and B share, from $3.35 billion, or $4.88 per share.

Excluding items, Google earned $6.99 per share.

Analysts on average had expected a profit of $6.70 per share, and revenue of $17.75 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Anya George Tharakan in Bengaluru; Editing by Maju Samuel and Simon Jennings)

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