Google profits quadruple but investors want more

Jul 22, 2005, 5:16 GMT

San Francisco - Internet search phenomenon Google Inc. saw its quarterly profit quadruple Thursday, but its shares plunged by more than 6 per cent in after hours trading as investors were spooked about an apparent slowdown in the company's growth rate.

The world's most popular search engine said that net income rose to 342.8 million dollars, or 1.19 dollars a share, from 79.1 million, or 30 cents, a year earlier. Sales almost doubled to 1.38 billion dollars, the Silicon Valley company said. Excluding fees passed on to other Web sites for displaying ads, sales were 890 million dollars.

The company's share price has more than tripled since its initial public offering last August but fell below 300 dollars after chief financial officer George Reyes warned analysts in a conference call that as the company continues to expand its rate of growth will likely slow.

Reyes also warned that third quarter growth may not show spectacular increases compared to last year, when its IPO kept Google constantly in the media spotlight.

The quadrupling of second quarter profits came after Google's earnings surged to a more than sixfold improvement in the first quarter.

In another worrying sign Google's second quarter revenue rose by 10 per cent from the previous quarter, compared to sequential growth of between 15 per cent and 28 per cent in the previous three quarters.