Google profits back on track as annual revenue hits record

Google logo Annual revenues at Google broke through $50bn for the first time in 2012

Google has reported a rise in profits with a jump in revenues, as it ploughed more money into advertising and research and development.

Net profit for the final three months of last year was $2.89bn (£1.83bn), up 7% on a year earlier. Revenues were up by more than a third at $14.4bn.

Google shares rose by almost 5% in after-hours trading, following the better-than-expected results.

Separately, computer maker IBM reported a modest rise in profits.

Record revenue

In the third quarter of 2012, Google's profits fell sharply from a year earlier. The final three months of the year marked a return to profit growth.

"We ended 2012 with a strong quarter," said the internet giant's chief executive Larry Page.

"And we hit $50bn in revenues for the first time last year - not a bad achievement in just a decade and a half.

"In today's multi-screen world we face tremendous opportunities as a technology company focused on user benefit. It's an incredibly exciting time to be at Google."

The fourth quarter figures are not directly comparable with a year earlier, as they include Motorola Mobility, which Google bought in May 2012. The subsidiary made a loss in the latest three month period.

'Amazing'

Analysts were impressed by Google's performance.

"Business looked really strong, especially from a profitability perspective - they really grew their margins in the core business, which is quite amazing," said Sameet Sinha from B Riley.

"Most of that strength seems to be coming from international markets, which grew revenues quite substantially - up 23%, year-over-year."

Google's strong performance came as another technology giant, IBM, revealed its earnings grew 6% in the fourth quarter, as it benefited from lucrative software businesses, such as internet-based computing.

IBM earned $5.8bn between October and December, compared to $5.5bn over the same period a year earlier.

It is the 40th consecutive quarter that IBM has enjoyed growth in earnings per share, compared to a year earlier.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • The OfficeIn pictures

    Fifty landmark shows from 50 years of BBC Two


  • French luxury Tea House, Mariage Freres display of tea pots Tea for tu

    France falls back in love with tea - but don't expect a British cuppa


  • Peter MatthiessenPeter and Paddy

    Remembering two of the greatest travel writers


  • Worcestershire flagFlying the flag

    Preserving the identities of England's counties


  • Female model's bottom in leopard skin trousers as she walks up the catwalkBum deal

    Why budget buttock ops can be bad for your health


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.