A sharp rise in internet search giant Google’s second quarter revenues and profits failed to satisfy Wall Street last night.
The stock fell 4% in after-hours trading as net profit for the three months to June 30 came in at €1.84bn (€1.4bn), a rise of 24% after revenues improved at the same rate to $6.82bn (€5.3bn).
Analysts, who had been expecting stronger figures, expressed concern about higher expenses and the fall-out from the European debt crisis. With about one-third of the company’s revenues coming from Europe, customer payments made with the euro have translated into fewer dollars than a year ago.
The California-based company has added nearly 1,200 employees in the quarter to the end June, giving it more than 21,800 workers.
After clamping down on its costs during most of last year, Google has been spending more freely this year as the US economy recovers, adding to signs of greater confidence in the technology sector.
Google said marketing departments were willing to pay more for the online ads that generate nearly all of its income, while people were also clicking on the commercial messages more frequently.
The trends have provided another indication that companies and shoppers are feeling more confident after the worst economic downturn in 70 years.
Patrick Pichette, Google’s chief financial officer, said: “We are really pleased with the way we are performing in this economy. That’s why we feel confident about the future.”
The number of revenue-generating clicks on Google’s ads in the second quarter increased 15% from the same time last year. It added the average price per ad click in the second quarter edged up 4% from last year, although this was slower than the growth seen during the previous two quarters.