Google shares soar past US$1,000 on strong earnings
Surge in stock price of internet giant Google, up 13.8 per cent on Friday, pushes S&P 500 to record highs
Shares in internet search and advertising titan Google soared more than 13 per cent on Friday to pass the US$1,000 mark for the first time after a strong earnings report.
The earnings demonstrated Google was smoothly building its presence in the mobile sector while advertising earnings rose all around, with particular help from Google’s YouTube website.
Advertising volume growth accelerated to 26 per cent year-on-year, Morgan Stanley pointed out, showing Google was well on top of the evolution of the market beyond personal computers to smartphones and tablets.
“Rather than struggling with a mobile transition, Google is benefitting from increased screen fragmentation,” the broker said.
Google reported its earnings after trade closed on Thursday.
The shares soared beyond the US$1,000 barrier in early trade on Friday, topping US$1,015 before settling at the close at US$1,011.41, up 13.8 per cent for the day.
The surge helped push the S&P 500 well beyond Thursday’s all-time closing high to a fresh record of 1,744.50, up 0.7 per cent for the day.
Google’s success helped pull shares of other technology firms up as well, with social networking leader Facebook rising 3.8 per cent, online retail power Amazon up 5.8 per cent, and Yahoo 2.0 per cent.
Together they helped drive the Nasdaq Composite index to a 1.3 per cent gain raising it to 3,914.28, the highest level since September 2000.
Google reported on Thursday a 36 per cent jump in its third-quarter net profit to US$2.97 billion, or US$8.75 a share. Revenues also beat forecasts with a 12 per cent jump year-on-year.
Analysts said it was doing well in all areas of business, and had proven its ability to profit from its Android smartphone platform.
“We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device,” Google chief Larry Page told analysts.
Pivotal Research Group warned of eventual erosion of the company’s still-healthy margins, but added: “Longer term, we remain optimistic about Google’s continued success as the leading seller of display-based media and ad tech, and as the dominant provider of paid search advertising.”
At the US$1,011 mark, Google shares were up 43 per cent from the beginning of the year, and the company’s market value reached US$337 billion, still shy of leader Apple’s US$462 billion.
Google was the second company on the S&P 500 list to top US$1,000. Online travel firm Priceline was the first past the post in September, soaring to US$1,