Google announced a fourth quarter net revenue of $4.2 billion, net income was down sharply to $382.4 million, or $1.21 per share, from $1.2 billion, or $3.79 per share, in the same period a year earlier.
Net income was down 68 percent year-over-year but excluding one-time items, Google's earnings were $5.10 per share and that's slightly higher than the $4.95 per share on a revenue of $4.1 billion analysts were counting on.
The main reason for the sharp decline in profit is a $1.09 billion asset-impairment charge related to investments in AOL and Clearwire. However, these impairments were offset slightly by tax benefits totaling $147 million. Google also recorded stock-based compensation charges of $286 million.
"Google performed well in the fourth quarter, despite an increasingly difficult economic environment," Google Chief Executive Eric Schmidt said in a prepared statement.
Google's earnings news follows weeks of speculation that the troubled economy may have undercut the company's online search advertising business, which provides most of its revenue and has been seen as relatively insulated from the broader slowdown.