Google makes almost $2B in profit in latest quarter
In another sign of a tech sector recovery, Google (GOOG)on Thursday surpassed Wall Street's expectations and reported a record fourth-quarter profit of nearly $2 billion.
The search giant's strong results for the quarter and year momentarily took attention away from its headline-grabbing threat last week to pull out of China over censorship and cyberspying.
Google said it earned $1.97 billion, or $6.13 a share, in the final three months of 2009, vs. $382 million, or $1.21 a share, in the final three months of 2008. Fourth-quarter revenue totaled $6.7 billion, a 17% increase.
Still, Google's stock price slipped $26.88, to $556.10, a 4.6% decline, in after-hours trading. Eric Schmidt, Google's CEO, called the fourth quarter an "extraordinary end to a roller-coaster year."
Google pushed hard last year to popularize its Google Apps suite of online clerical tools, YouTube and its Android mobile phone operating system. But the vast majority of its sales and profit continue to come from search advertising.
"When you look at where their revenue comes from, it's all about search ads," says Kevin Lee, CEO of search consultancy Didit.
Google CFO Patrick Pichette said fourth-quarter results were "very strong" in many of the major markets the company operates in around the globe. Revenue from outside the United States totaled $3.5 billion, representing 53% of total revenue in the fourth quarter of 2009, up from 50% in the fourth quarter of 2008.
Whether China stays in that mix remains to be seen. Schmidt said the company is "in conversations with the Chinese government" about easing censorship and addressing cyberattacks designed to steal proprietary data. He acknowledged that Google is obeying China's laws and offering censored results in China right now.
"We remain quite committed to being there," Schmidt said in a conference call with analysts and reporters.
Earlier Thursday, Secretary of State Hillary Rodham Clinton delivered a watershed speech outlining new initiatives to quell censorship and deter cyberattacks globally. She specifically called on China to conduct a "thorough review" of Google's complaints. "We look for that investigation and its results to be transparent," Clinton said.
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