October 14, 2010 / 8:20 PM / 9 years ago

Instant view: Google trumps Wall Street targets, shares leap

LOS ANGELES (Reuters) - Google Inc (GOOG.O) beat Wall Street’s quarterly earnings handily with the help of strong revenue growth and spending controls, sending its shares surging 8 percent.

Commentary:

COLIN GILLIS, ANALYST, BGC PARTNERS

“Clearly their earnings look good. Top line is healthy, expense controls are good.”

“It’s a great quarter. It’s nice to see the top line growing north of 20 percent, that helps drive some of the leverage. If you’re looking for the counterpoints, they are there. The EPS was assisted by a lower than expected tax rate, so it’s not all perfectly clean. For (investors) concerned on expenses, they did layer in 1,500 people. They set a record in terms of hiring, a near-term record.”

YOUSSEF SQUALI, ANALYST, JEFFERIES & CO

“Google looks strong throughout, with good cost management. This bodes well for the fourth quarter and fiscal 2011.”

CLAY MORAN, ANALYST, THE BENCHMARK CO

“Strong quarter, revenues are a nice beat, strength in the core search business as paid clicks is up 16 percent year-over-year. Bottom line big beat, but partially due to higher interest income and a lower tax rate.”

“The after-hours reaction may reflect excess pessimism heading into the quarter. But if not, it may be a bit of an aggressive reaction due to the fact that some of the beat was due to nonoperating items, and that the company materially ramped its capital spending during the quarter.”

AARON KESSLER, ANALYST, THINKEQUITY

“Clearly their revenues were strong and that led to a little better margin as well. It looks like inline operating expense and better revenue, so you saw some nice leverage.”

BRIAN PITZ, ANALYST, UBS

“Looks like a great number. We were high on the Street and they beat our number pretty handily.

“There are some currency benefits on the cost-per-click side. They hedged part of that, so that doesn’t include any currency. Those are just raw numbers, so you’re going to see some benefits to pricing from currency.

“Looks like business is solid across the board. The biggest concern for investors was expenses. Given the EPS number, it looks like margins have to be better than what the Street was expecting.

Reporting by Liana Baker in New York, Alex Dobuzinskis in Los Angeles and Gabriel Madway in San Francisco

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