Google April 14 reported earnings, excluding traffic acquisition costs, of $6.54 billion on non-GAAP earnings per share of $8.08 for the first quarter, which saw Google CEO Eric Schmidt turn the CEO role over to co-founder Larry Page.
Analyst consensus called for Google to announce earnings of $6.31 billion and earnings per share of $8.14, putting Google at a rare EPS miss of analysts' estimates.
Google's Q1 profit rose 17 percent, as the company reported net income of $2.3 billion, or $7.04 per share, compared with $6.06 EPS in the year ago quarter. With the $2.04 billion in traffic acquisition costs, Google reported revenues of $8.58 billion, a 27 percent bump from the first quarter 2010.
"We had a great quarter with 27 percent year-over-year revenue growth," said Google CFO Patrick Pichette in a statement. "These results demonstrate the value of search and search ads to our users and customers, as well as the extraordinary potential of areas like display and mobile."
Display and mobile were hot topics on Google's Q1 earnings call, where new Google CEO Larry Page kicked off the conversation to discuss how pleased he is that his newly-promoted management team has "hit the ground running."
Google CEO Larry Page took over for Schmidt April 4 and quickly reorganized the senior management team, promoting high-level executives to head business lines and report directly to him.
Directly reporting to Page are Andy Rubin, senior vice president of mobile; Vic Gundotra, senior vice president of social; Sundar Pichai, senior vice president of Chrome; Salar Kamangar, senior vice president of YouTube and video; Alan Eustace, senior vice president of search; Jeff Huber, senior vice president of local and commerce; and Susan Wojcicki, senior vice president of ads. Jonathan Rosenberg, senior vice president of product management, left the company.
Page confirmed he was running day-to-day operations at Google, that executive chairman Schmidt is traveling to strike partnerships and that co-founder Sergey Brin is working on a few emerging projects.
He also vaguely alluded to the management streamlining when he said he made a number of changes to simplify Google's reporting structure to "improve our velocity and execution."
"Everything we told you about last quarter has happened exactly as we expected. It's all working very well, exactly as we planned," Page said.
With 65 percent of the U.S. desktop search market and as much as 90 percent in parts of Europe, Google's areas of growth potential have turned to display and mobile advertising.
Huber, who spoke after Page, said mobile search has grown 500 percent in the last two years with 350,000 Android devices activated a day and more than 3 billion applications downloaded from Google's Android Market, up 50 percent from the fourth quarter.
Wojcicki, who followed Huber to discuss ads, said that many Google advertisers are starting to run mobile-only ad campaigns rather than bundling them with desktop ad campaigns.
She also said YouTube revenue is doubling year over year, as Google helps the video-sharing Website transition to more long-form content to keep users more engaged and seeing the Website's increasingly ubiquitous display ads.
Google has $36.7 billion in cash and now employs 26,316 full-time employees worldwide.