For the quarter ended in June, the search provider reported profits of $3.93bn (£2.5bn, €3.6bn), or $6.43 per share, up 17% from the same quarter in 2014.
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Google’s stock jumped more than 7 percent in the after-market hours on Thursday, after the company reported strong earnings results for the second quarter. Revenues of all of Google websites combined increased by 13% from past year and 4% compared to the first quarter at $12.4 billion.
Porat, who joined Google in late May from banking behemoth Morgan Stanley, is expected to take a more frugal approach to Google’s investments.
Google will be valued at $545 billion at the highest price target of $800.
At least 27 brokerages raised their price targets on Google’s stock by as much as US$150 to as high as US$800, with analysts also welcoming new chief financial officer Ruth Porat’s emphasis on disciplined spending.
While Google will continue to explore promising opportunities, Ms Porat pledged to do so “with great care regarding resource allocation”. Moreover, for companies as big as Google, it is seen quintessential to spend on R&D for a better business and overall public image. According to Jefferies, YouTube is seeing significant growth in revenue due to TrueView ads.
Excluding currency fluctuations, revenue rose 18% from a year earlier, compared to 17% growth in the first quarter.
Profit before certain items was $6.99 a share, the company said in a statement Thursday.
Kordestani also confirmed that about 30 percent of all mobile searches are location-based, which shows that people want to know what is relevant around them. Interestingly, the cost per click (CPC) – advertisers get paid when users click on ads – fell 11 percent, though the sheer number of ads made up for the decline.
She said even the advertising of desktop platform done very well in the revenue growth and youtube attracted many marketers to its advertising platform with the increased viewer engagement past year.
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Google’s ad revenue has been under pressure as consumers access its services on mobile devices such as smartphones and tablets, whose ad rates are typically lower. Revenue growth is largely credited to the strength of Google’s mobile ad business during the second quarter.
