Google's Q4 Numbers Wow Wall Street

03 February 2005

In the Mammon of Lower Manhattan there is a direct correlation between the 'wow factor' and the number of zeroes trailing one or more digits in a profits statement.

On Tuesday, the Wall Street Wow-O-Graph shot straight off the top of chart as Google unveiled its fourth quarter profits, which comfortably exceeded the moneymen's already bullish growth expectations of 20%.

In the three months to December 31 (Google's first full quarter as a publicly quoted company), Larry and Sergey's excellent adventure spawned revenues 28% up on the preceding quarter, which itself reflected 15% growth.

Including all costs, Q4 net income rose to $204 million (€156.72m; £108.56m). Earnings-per-share rose year-on-year to 71 cents from 10 cents. And using the proforma profits measure by which most analysts judge performance, Google's earnings in the final months of last year reached 90 cents, compared with Wall Street forecasts of about 75 cents.

Whooped cfo George Reyes: "We believe we have become the internet's largest generator of advertising revenue." He declined, however, to play the Wall Street game of crystal ball-gazing.

And ceo Eric Schmidt likewise refused to invent analyst-pleasing future numbers, although he too was in bull mode: "We believe that large companies worldwide have many, many dollars to direct to this kind of [search] advertising. There doesn't seem to be any price resistance," he said.

Wall Street, normally a bastion of conservatism, is ready to embrace a certain breed of nonconformist: one that generates a goodly number of trailing of zeroes in its earnings.

Google obliged handsomely and its stock market value soared 9% to $57bn after news of its earnings emerged on Tuesday.

Data sourced from Financial Times Online; additional content by WARC staff