Google reporting a profit jump

GOOGLE is expected to report significant gains in profit and sales, under its incoming chief executive.

The internet giant will posts its first earnings report under Larry Page, the co-founder who resumed the CEO role earlier this month, this week.

Google's gains are expected to come as the company is thought to have enjoyed improving interest in, and prices paid, for its online advertising.

Analysts polled by FactSet Research expect Google to report first-quarter earnings excluding one-time items, of $8.14 a share, and $6.3 billion in net revenue. That compares to earnings excluding items of $6.76 a share, and $5 billion in net revenue in the same period a year earlier.


Kaufman Bros. analyst Mayuresh Masurekar told clients in a recent research note that the prices paid for Google's popular search advertisements are likely to have grown 11 percent in the first quarter, compared to the earlier period - "better than our prior expectations of high single digits."

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In particular, Masurekar noted that prices paid for advertising placed by the financial industry likely rose 40 percent, offsetting a 30 percent decline for prices paid by the travel industry.

The analyst estimated that Google will report that paid clicks, a key metric for the company that measures the rate at which internet users click on the company's advertising, rose 16 percent in the quarter.

Masurekar has a buy rating on Google shares, and a $705 price target.

Google's shares closed Friday down slightly at $578.16.

Google retains a commanding lead in the US search market, often making it the first choice among online search advertisers. Google had over 65 percent of the US market as of February, according to data from comScore, compared to the combined 30 percent share held by partners Microsoft and Yahoo.

Earlier this month, Page assumed the CEO role, as Eric Schmidt stepped aside to take the job of executive chairman. Page had been serving as CEO when Schmidt first won the job in 2001, and led the company through a decade of impressive growth.

Read more: http://www.news.com.au/business/google-reporting-sharp-profit-gain/story-fn7mjon9-1226036655142#ixzz1J6KtaSkT