As Google’s first quarter results exceeded analysts’ expectations, the shares of search engine company rose on Friday.

As Google’s first quarter results exceeded analysts’ expectations, the shares of search engine company rose on Friday.

Published: 23 Apr 2006

As Google’s first quarter results exceeded analysts’ expectations, the shares of search engine company rose on Friday.

Google shares gained US$4.50 to finish at US$415 on the NASDAQ Stock Market, then climbed US$29.89, or 7.2 percent, in extended trading.

As per the information available, the company earned US$592.3 million during the first three months of the year. That compared with net income of $369.2 million, at the same time last year. Quarterly revenue surpassed US$2 billion for the first time in Google’s seven-year history, reaching US$2.25 billion , a 79 percent increase from US$1.26 billion last year.

After subtracting the commissions that the company pays to thousands of advertising partners, Google’s revenue totaled US$1.53 billion. Google’s revenue, excluding ad commissions, exceeded the average analyst estimate by US$90 million.

“Three months ago, the company disappointed investors, even though its profit grew 82 percent, and its stock sagged. This time, Google’s ascent was enough to satisfy,” reported iht.com. The reported quoted Safa Rashtchy, an analyst at Piper Jaffray saying: “Investors, surprisingly, acted rationally this quarter and had low expectations.”

Eric Schmidt, Google’s chief executive reportedly said the market share increase might be related to the use of some of the company’s new products, like Google Video, Google Earth and Google Maps, as well as the introduction of Google News in several countries. These services attract people to Google’s site, where they may also conduct searches, he reportedly said.

“They drive the branding,” he said, referring to the new services that the company is steadily rolling out. “All of a sudden Google is top of mind again, over and over again.”

According to Reuters, Goldman Sachs, Lehman Brothers and Merrill Lynch raised their price targets for Google shares well above the $500 mark, citing the company’s ability to pull in a greater share of Internet advertising dollars than its competitors. “Google’s growth continues to outpace the search industry ... and we expect this to continue as the company monetises additional verticals such as Maps, Local, etc.,” Goldman analyst Anthony Noto wrote in a research report.

Reuters report added: “As recently as February, several bouts of negative news sent Google shares as low as $330, particularly concerns the company would not meet Wall Street’s bullish growth forecasts. But new agreements with advertising affiliates to expand the reach of its paid search listing programmes, the introduction of advertising on its Google Maps locator system and the primacy of its search technology have kept it ahead of rivals. Merrill Lynch upgraded its rating on Google to “buy” from “neutral” and bumped its price target on the share to $540, while Lehman Brothers raised its price target on Google to $530 from $450.”

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