MOUNTAIN VIEW, Calif. (AP) — Google Inc. will get a chance to win back skittish investors late Thursday when the Internet search leader is scheduled to release its second-quarter earnings.
The report, due out shortly after the stock market closes, will cover a hectic period spanning Google's first three months under the leadership of co-founder Larry Page. The changing of the guard occurred at the start of the quarter when Eric Schmidt ended a decade-long reign as Google's CEO to hand the job over to the younger and more aloof Page, who is 38.
Wall Street has given Page a chilly reception, largely because he has always made it clear that he intends to invest in projects that might take years to pay off instead of scrambling to surpass the quarterly earnings targets set by securities analysts.
Although Page's long-term focus may prove to be smart, the philosophy rattled investors already worried about Google's expenses accelerating at a faster pace than its revenue. It hasn't helped that Page has had little to say publicly about his strategy since becoming CEO. To add to the anxiety, Google is under increased regulatory scrutiny that includes broad inquiries into its business practices in the U.S. and Europe.
The uncertainty has contributed to a 14 percent decline in Google's stock price since the company announced Page's CEO appointment in January while the technology-laden Nasdaq composite index has gained 3 percent during the same stretch. Google shares closed Wednesday at $538.26.
The stock has been rebounding in the past two weeks, largely on the hope that the company's earnings will provide as another reminder of Google's moneymaking prowess.
Excluding costs for employees stock, analysts expect Google to earn $7.84 per share on revenue of $6.54 billion after subtracting the commissions the company pays its advertising partners.
Even if Google's revenue exceeds analyst forecasts, the earnings still could fall below expectations if the management continued to boost its spending as aggressively as it has in the prior two quarters. A big chunk of the spending will hinge on how many more people Google hired in the spring. After adding 1,900 workers in the first quarter, analysts believe the number of new employees may have been even higher in the second quarter — traditionally a prime hiring time because of college graduations typically yield promising new talent. Google already has pledged to hire more than 6,200 employees this year, the most in its 13-year history.
One of Page's pet projects, a Facebook-like social network called Plus, also seems to be making people feel better about Google. Since its June 28 rollout as an invitation-only service for now, Plus has been getting mostly positive review and raising hopes that Google has finally come up with a product that will counter the threat posed by Facebook's growing popularity.
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