Google posts 37 percent higher first quarter profit

Google announced its first quarter financial results, the search giant booked a profit of $1.96 billion, or $6.06 per share, on revenue of $6.77 billion. Net income is up 37 percent and revenue has risen by 23 percent compared to the same period in the year before. Adjusted income for the quarter was $6.76 per share, beating analyst expectations of earnings of $6.60 per share and $4.95 billion in revenue. Despite performing better than anticipated, Google shares have sold off 4.75 percent in after-hours trading to $567. According to an analyst polled by MarketWatch, investors are dumping Google because the company's costs grew significantly in the quarter.

“Google performed very well in the first quarter, with 23% year over year revenue growth driven by strength across all major verticals and geographies,” said Patrick Pichette, CFO of Google. “Going forward, we remain committed to heavy investment in innovation -- both to spur future growth in our core and emerging businesses as well as to help build the future of the open web.”

Google reported revenues of $6.77 billion for the quarter ended March 31, 2010, an increase of 23% compared to the first quarter of 2009. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the first quarter of 2010, TAC totaled $1.71 billion, or 26% of advertising revenues.