Google's Profit Tops Estimates
January 23, 2009 at 5:30 AM (PT)
GOOGLE's fourth-quarter profit slumped after several big writedowns, but the company's overall results were still better than expected given the bleak economy, writes THE NEW YORK POST. Investors also saw the earnings report as evidence that the free-spending Internet giant had finally reined in costs. In recent months, GOOGLE has slowed hiring -- it added only 99 employees in the quarter -- and cut back on corporate gifts and other freebies.
On a conference call, GOOGLE CEO ERIC SCHMIDT admitted cost control "has eluded us in the past, but we've got the formula down now."
Fourth-quarter profit fell 68% after the company wrote down $1.09 billion for declining investments in TIME WARNER's AOL online division and CLEARWIRE. GOOGLE also did not escape unscathed. The company said it would offer its employees the chance to exchange their stock options for new ones with a lower exercise price after its stock price fell sharply over the past year.
Fourth-quarter net income, including one-time charges, was $382 million, or $1.21 a share, compared with $1.2 billion, or $3.79 a share a year ago. Its profit had grown in every other quarter. Excluding one-time items and stock-option costs, profit was $5.10 a share, topping the consensus estimate of $4.96 a share.
GOOGLE's shares rose $3.42, or 1.1%, to $306.50 in NASDAQ trading yesterday.
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