Google soars as earnings wow Wall Street

GMT 16:24 2015 Friday ,17 July

Arab Today, arab today Google soars as earnings wow Wall Street

New York - AFP

Google shares rocketed to all-time highs Friday following an earnings report that wowed Wall Street with strong mobile advertising revenue gains and a bullish outlook for its Youtube business.

Near 1445 GMT, Google shares stood at $658.59, up 13.6 percent, lifting its market capitalization well above $400 billion, second only to Apple, which is valued at $745 billion.

As trading opened the online search and advertising giant's added an instant $52 billion in market value, an all-time record for the start of trade, said Howard Silverblatt, senior index analyst at S&P Indices.

Google reported after trade closed on Thursday that second-quarter net income climbed two percent to $3.4 billion on an 11 percent rise in revenue to $17.7 billion, thanks in part to increases in mobile advertising.

New chief financial officer Ruth Porat was also especially upbeat on the potential from Google's Youtube streaming video business.

Time spent watching YouTube videos on smartphones or tablets has surged as part of a 60 percent jump in overall viewer time spent on the website, Google said.
Porat said Youtube has more than one billion users and that the number of people in the key 18-49 age group who watch YouTube videos on mobile devices was greater than the number watching cable television.

Analysts also pointed  to signs that Google was reining in spending and comments from Porat that suggested greater shareholder returns were in the horizon.

"Dawn of a New Era?" asked a note from Deutsche Bank with a "buy" recommendation.

"Kinda feels like it."

BMO Capital Markets issued a report following the call amplifying on an upgrade to the stock released the prior day.

"While we tepidly stepped into this recommendation yesterday, our conviction is now much stronger and we look for incremental insight over the coming quarters on continued cost discipline and the potential for capital return to support the thesis further," BMO said.


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