NEW YORK (Reuters) - Google Inc posted better-than-expected quarterly earnings as it cut costs and rode a migration to online advertising from traditional media, sending its shares up more than 5 percent in extended trading.
Google's first quarter income outpaced forecasts despite a broad-based slump in global advertising. Some analysts say the search giant may be able to sustain the momentum of revenue growth over the rest of 2009 as online advertising becomes a bigger slice of the overall market.
COMMENTARY:
YOUSSEF SQUALI, MANAGING DIRECTOR, JEFFERIES & CO.
"Good quarter considering the environment. Cost containment, including capex, was pretty impressive, which is what's needed to make the stock work short-term."
MARTIN PYYKKONEN, SENIOR ANALYST, WUNDERLICH SECURITIES
"Kind of a relief rally to some.
"In one sense, revenue was certainly not robust, but considering the environment people are obviously taking that as somewhat of a comfort that it wasn't any worse."
"Tougher times but better discipline within the company on the cost management side (meant) that they were still able to come in and beat the bottom line pretty nicely by a few percentage points."
"Seventeen percent paid-click volume growth was actually pretty good, but makes you wonder why the revenue number wasn't a little bit higher."
RICHARD SPARKS, SENIOR EQUITIES ANALYST, SCHAEFFER'S INVESTMENT RESEARCH
"The numbers are better than expected, especially with respect to the earnings per share number. It appears expenses were well contained, but some of the metrics were better than expectations.
"The one thing I haven't seen yet is any type of guidance and that's going to be the 'truth', so to speak. Everyone's looking now to companies to see what they're predicting since there's been so much poor earnings and so much cloudiness on the earnings front.
"I don't think they're going to be totally immune (to the economic slump) but with actual earnings coming in at $5.16 per share..., when you look at those, that's still, according to the information that I have, the best actual quarterly number that they've reported.
"Although it looks like the revenue growth is slowing and earnings growth is also slowing, they're still growing. The earnings are still increasing so that's a big positive."
"You can tell that the new CFO is having an impact in terms of cutting back on expenses and realigning the operating expenses and cost structure with the lower revenue run-rate.
"Search volume is strong and that's translating into growth that they're seeing on the paid-click side. So consumers are still shopping. If anything, they're shopping more vigorously online for bargains and that's helping them offset some of the weaknesses in the search-ad budgets."
SAMEET SINHA, SENIOR ANALYST, JMP SECURITIES
"There will be challenges but I think we've seen strength both domestically and in Europe.
"As advertisers are getting better control of their budget and a better understanding of their business under these macro conditions, they are taking money away from newspaper and television and going back online to advertise, and Google gets a disproportionate part of the market."
JASON AVILIO, ANALYST, KAUFMAN BROS
"It was a good quarter. Revenues were in line with the street consensus and EPS beat. They took market share.
"Economically speaking, I think Q1 is the most challenging quarter, so the momentum should continue for the rest of the year."
(Reporting by Gina Keating, Sue Zeidler, Gabriel Madway, Leah Schnurr and Alexei Oreskovic, Compiled by Edwin Chan)
BILIBALA, ANALST, B&L FINANCE
"I am still reviewing the financial statement, so far 1q09 revenue is lower than my expectation."
"I will update my analysis promptly after the Google's Q&A section."
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