Google Shares Surge as 2Q Results Easily Top Expectations

By FOXBusiness

Are Google Shares Undervalued?

GVA Reseach’s David Garrity, Senior Equities Strategist Jared Levy and FBN’s Shibani Joshi on Google’s second-quarter earnings report.

Google (NASDAQ:GOOG) saw shares surge in after-hours trading as the company posted second-quarter financial results that easily topped expectations.  The search-engine behemoth saw strong growth in paid clicks, as the average cost-per-click, or the rate advertisers pay per click, fell during the quarter.

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Aggregate paid-clicks increased 42% from the second quarter of 2011, or 1% compared to the previous quarter. The average cost-per-click fell 16% compared to the same period last year and increased 1%, sequentially.

The company weighed in with second-quarter net income of $2.79 billion or $8.42 a share, compared with last year’s profit of $2.51 billion or $7.68 a share.

On an adjusted basis, earnings per share rose to $10.12, up from $8.74 a share in the second-quarter of last year.

Total revenue for the quarter came in 35% higher at $12.21 billion, as revenue excluding traffic acquisition -- the revenue number the Street watches -- rose to $9.61 billion, compared with $6.92 billion, one year ago.  International revenues came to $5.96 billion, 54% of Google revenues for the second quarter.

The results beat expectations on both the top and bottom lines, as analysts polled by Thomson Reuters had predicted earnings of $10.04 on ex-TAC revenue of $8.41 billion.  Earnings per share missed the "whisper number," the unofficial expectation on the Street, for $10.53 a share, according to

Google’s CEO Larry Page boasted of the company’s strong revenue growth and touted the launch of new products, including the Nexus 7 tablet.

“This quarter is also special because Motorola is now part of the Google family, and we’re excited about the potential to build great devices for users,” Page said, in a statement.

The company completed its acquisition of Motorola Mobility Holdings on May 22.  Motorola revenues came to $1.25 billion, or 10% of consolidated revenues in the quarter.

Globally, the company disclosed that it employs 54,604 full-time employees, adding 20,293 through the Motorola acquisition.  That compares to a total headcount of 33,077 reported at the end of the first quarter.

Google leapt more than 3% in the aftermarket session, on the strength of results.