By Yinka Adegoke
NEW YORK (Reuters) - Google Inc's quarterly earnings beat Wall Street forecasts as strong advertising sales on its self-branded websites helped the Internet leader defy the gloom pervading the tech sector.
The results, which sent Google shares up 2.6 percent in after-hours trading, were a relief for investors who had been stunned by a series of dismal reports from Microsoft Corp, Intel Corp and other tech companies.
"At least we have something to feel good about with this Google news in what has been shaping up to be a gloomy earnings period," said Keith Wirtz, president and chief investment officer of Fifth Third Asset Management, which manages $22 billion.
"It tells me that Google is very focused on their franchise and execution as a marketing, advertising and media company. It speaks highly to their business focus."
Google said fourth-quarter net income fell to $382 million, or $1.21 a share, from $1.21 billion, or $3.79 a share, a year earlier due to impairment charges on its investments in Clearwire Corp and Time Warner Inc unit AOL.
Excluding one-time charges, profit was $5.10 a share, beating the average analyst forecast of $4.95 according to Reuters Estimates.
Revenue rose 18 percent to $5.7 billion -- a shadow of the 50 percent growth levels that Google used to enjoy, but considered by analysts to be a robust performance given the weak economy and corporate cutbacks in advertising spending.
"It was, all things considered, very good numbers," said Wunderlich Securities analyst Martin Pyykkonen, noting Google's non-GAAP operating margin of 38 percent was also solid.
"In this market and relative to the numbers that are being put out -- and I would go so far as to say relative to the numbers that Yahoo probably will put out next week -- these will look good and maybe I'll use the term 'as good as it gets' as far as Internet stock performance goes."
WEAKNESS IN UK MARKETS
Google's revenue comes via searches on its branded sites such as google.com and google.co.uk, as well as through partnerships which license its search advertising platform.
Google-owned sites generated 67 percent of revenue, or $3.81 billion, rising 22 percent from a year ago. Traffic acquisition costs, the portion of revenues shared with Google's partners, decreased to $1.48 billion.
Cantor Fitzgerald analyst Derek Brown, who has a buy rating on Google and makes a market in its shares, said that was better than he had expected.
"It's clear that macroeconomic challenges continue to rob Google of growth, but it seems equally clear that the company continues to make headway in this market, and take share in this market," Brown said.
Google Chief Executive Eric Schmidt struck a cautious note, saying the last quarter had benefited from the holiday season.
NEW YORK (Reuters) - Google Inc's quarterly earnings beat Wall Street forecasts as strong advertising sales on its self-branded websites helped the Internet leader defy the gloom pervading the tech sector.
The results, which sent Google shares up 2.6 percent in after-hours trading, were a relief for investors who had been stunned by a series of dismal reports from Microsoft Corp, Intel Corp and other tech companies.
"At least we have something to feel good about with this Google news in what has been shaping up to be a gloomy earnings period," said Keith Wirtz, president and chief investment officer of Fifth Third Asset Management, which manages $22 billion.
"It tells me that Google is very focused on their franchise and execution as a marketing, advertising and media company. It speaks highly to their business focus."
Google said fourth-quarter net income fell to $382 million, or $1.21 a share, from $1.21 billion, or $3.79 a share, a year earlier due to impairment charges on its investments in Clearwire Corp and Time Warner Inc unit AOL.
Excluding one-time charges, profit was $5.10 a share, beating the average analyst forecast of $4.95 according to Reuters Estimates.
Revenue rose 18 percent to $5.7 billion -- a shadow of the 50 percent growth levels that Google used to enjoy, but considered by analysts to be a robust performance given the weak economy and corporate cutbacks in advertising spending.
"It was, all things considered, very good numbers," said Wunderlich Securities analyst Martin Pyykkonen, noting Google's non-GAAP operating margin of 38 percent was also solid.
"In this market and relative to the numbers that are being put out -- and I would go so far as to say relative to the numbers that Yahoo probably will put out next week -- these will look good and maybe I'll use the term 'as good as it gets' as far as Internet stock performance goes."
WEAKNESS IN UK MARKETS
Google's revenue comes via searches on its branded sites such as google.com and google.co.uk, as well as through partnerships which license its search advertising platform.
Google-owned sites generated 67 percent of revenue, or $3.81 billion, rising 22 percent from a year ago. Traffic acquisition costs, the portion of revenues shared with Google's partners, decreased to $1.48 billion.
Cantor Fitzgerald analyst Derek Brown, who has a buy rating on Google and makes a market in its shares, said that was better than he had expected.
"It's clear that macroeconomic challenges continue to rob Google of growth, but it seems equally clear that the company continues to make headway in this market, and take share in this market," Brown said.
Google Chief Executive Eric Schmidt struck a cautious note, saying the last quarter had benefited from the holiday season.
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