Earnings Roundup: Google Q3 profit up 46 percent

Google Inc.‘s third-quarter profit soared 46 percent, hurdling the enormous expectations that have elevated the Internet search leader’s stock price by more $100 during the past month.

The Mountain View-based company said Thursday that it earned $1.07 billion, or $3.38 per share, for the three months ended in September, up from net income of $733.4 million, $2.36 per share, at the same time last year.

If not for the cost of awarding stock to its steadily expanding work force, Google said it would have earned $3.91 per share. That topped the average estimate of $3.78 per share among analysts surveyed by Thomson Financial.

Revenue for the period totaled $4.23 billion, a 57 percent increase from $2.67 billion last year.

After subtracting commissions paid to its thousands of advertising partners, Google’s revenue stood at $3.01 billion – about $70 million above the average analyst estimate.

The performance represented a return to form for Google after its second-quarter earnings disappointed Wall Street. The company has surpassed analyst estimates in all but two of the 13 quarters since its August 2004 initial public offering.

Dow Jones & Co., publisher of the Wall Street Journal, reported sharply lower profits for its third quarter Thursday compared with a year ago, when it recorded a large tax-related accounting gain.

Revenues rose nearly 20 percent as the company absorbed the rest of Factiva, a news database service, and profits excluding costs related to the company’s pending acquisition by Rupert Murdoch’s News Corp. were ahead of analysts’ estimates.

It was likely the last time Dow Jones would report earnings as a separate company since the $5 billion deal with News Corp. is expected to close later this year.

Dow Jones, which also publishes Barron’s, Dow Jones Newswires, and stock market indicators including the Dow Jones industrial average, earned $13.8 million, or 16 cents per share, in the three months ending in September, versus a profit of $105.4 million, or $1.26 per share, a year earlier.

The summer vacation season was very good to Southwest Airlines Co. and Continental Airlines Inc., which reported record passenger loads and higher profits despite rising fuel prices.

Southwest reported Thursday that its third-quarter profit more than tripled from a year ago. Continental posted higher earnings thanks to heavy traffic on international routes.

And people are still lining up to fly, even with several rounds of recent fare hikes. United Air Lines made the latest increase, adding $20 per round trip on nearly all its domestic flights, and was quickly matched by Delta Air Lines Inc. and by Continental on some routes.

The higher fares don’t seem to be discouraging travel. Weakness in parts of the economy such as housing don’t seem to be having much effect either – Continental executives said advance bookings for travel the rest of the year were ahead of last year’s pace.

But the fuel price outlook is much worse than it was just a couple of weeks ago. Oil prices surged again Thursday, moving closer to the $90 per barrel barrier. Fuel is typically an airline’s second biggest cost, after labor.

Houston-based Continental said it earned $241 million, or $2.15 per share, in the three months that ended Sept. 30. That compared with $237 million, or $2.17 per share, a year earlier, when the company realized a $92 million gain on an investment sale.

Dallas-based Southwest, the nation’s biggest discount carrier, said net income for the third quarter jumped to $162 million, or 22 cents per share, compared with $48 million, or 6 cents per share, a year earlier.

Revenue rose 11 percent, to $2.59 billion, as Southwest filled 76.6 percent of the seats on the average flight, a record.

The Hershey Co., the nation’s largest candymaker, said Thursday its third-quarter profit tumbled 66 percent as it spent heavily to streamline its operations and struggled with aggressive competition and slackening sales.

Just two weeks after its chairman and chief executive announced he will leave, Hershey also slashed its 2007 forecast – the third such setback this year as the company struggles to recover from a year-long slump.

Its shares fell more than 3 percent in afternoon trading.

The maker of Hershey’s Kisses and Reese’s candy said it earned $62.8 million, or 27 cents a share, for the three months ending Sept. 30, versus a profit of $185 million, or 78 cents per share, in the same period a year earlier.