Google posts higher profit

SAN FRANCISCO – Google Inc. shifted into a higher gear in the third quarter and began to leave the recession behind as the 11-year-old Internet search leader recorded its biggest profit yet.

Revenue growth also accelerated for the first time since the U.S. recession began in December 2007.

The results released Thursday are the strongest indication yet that the Internet advertising market is bouncing back from its worst funk since the dot-com bust at the start of the decade.

Google is considered a good barometer for the state of online commerce because its search engine serves as the hub of the Web’s largest advertising network.

“The worst of the recession is clearly behind us and because of what we have seen, we now have the confidence to be optimistic about our future,” Eric Schmidt, Google’s chief executive, told analysts in a conference call.

Google’s shares rose $17.13, or 3.2 percent, to $547.04 in extended trading. The stock remains well below its peak of nearly $750 reached almost two years ago, but has more than doubled from its 52-week low of $247.30.

Google earned $1.64 billion, or $5.13 per share, in the three months ended in September. That represented a 27 percent increase from $1.29 billion, or $4.06 per share, at the same time last year.

Excluding expenses for employee stock compensation, Google said it would have made $5.89 per share – above the average estimate of $5.42 per share among analysts polled by Thomson Reuters.

Revenue for the three months ending in September climbed 7 percent to $5.94 billion. That is Google’s fastest growth rate so far this year.

In a telling sign that things are picking up again, Google’s third-quarter revenue rose 8 percent from the second quarter. That’s the biggest sequential quarterly increase since the end of 2007.