Google’s earnings come in low but still reassure investors

SAN FRANCISCO — Google is still flexing its moneymaking muscle even as a technological upheaval nibbles at its dominance in Internet search and European antitrust regulators question some of the company’s practices.

Google’s first-quarter earnings rose 4 percent from last year to $3.6 billion as the company’s Internet-leading advertising network lifted revenue by 14 percent to $17.3 billion. After accounting adjustments, Google said it would have earned $6.57 per share, 4 cents below the estimates among analysts polled by FactSet. After subtracting ad commissions, revenue was $13.9 billion, about $100 million below analysts’ predictions.

It marked the sixth consecutive quarter that Google’s earnings have fallen below the analysts’ targets that shape investors’ expectations.

Investors, though, were encouraged by a healthy gain in the number of people looking at Google’s ads, even as the average prices for those marketing messages extended a 3½-year slump. The market also had been bracing for more disappointing numbers, triggering a “relief rally” when the results weren’t as bad as feared, BGC Partners analyst Colin Gillis said.

Google’s stock surged in extended trading after the results came out Thursday. Gillis said that gain also likely reflected investors’ general ebullience after the technology-driven Nasdaq index closed at a new high.

Besides releasing its latest report card, Google also settled up with shareholders for a stock split that created a class of shares with no voting power to keep CEO Larry Page and fellow co-founder Sergey Brin in control of the company.

Google will pay $522 million in stock and cash to compensate stockholders for a pricing gap between the non-voting Class C shares and Class A shares during their first year of trading.

The first-quarter earnings miss stemmed from several factors, including a stronger dollar that depressed overseas revenue and Google’s penchant for spending heavily on far-flung projects such as driverless cars, medical research and Internet-beaming balloons that may take years to pay off, if ever.

Google faces changes in how people find information and peruse digital content.

Mobile applications have enabled people to go directly to the digital content they want, instead of searching on Google.