China considers same tax rate for domestic, overseas firms (AFP)
AFP - Chinese lawmakers have mulled a draft law that would impose a 25 percent income tax on both domestic and foreign firms, eliminating the preferential rate for overseas companies, according to state media.
Google grows worldwide and beats forecasts; shares rise (Reuters)
2008.10.17By Eric Auchard 11 minutes ago
SAN FRANCISCO (Reuters) - Google Inc (GOOG.O) quarterly profit surpassed Wall Street forecasts, sending shares up more than 10 percent as the Internet search and advertising leader withstood deepening economic turmoil around the globe.
Web traffic and revenue growth were strong in all major parts of the world and searches were up for almost every industry using Google, Chief Executive Eric Schmidt said.
But he added that there was uncertainty in financial services, media and the retail sectors.
"We are all in uncharted territory," he said of the economy, adding that Google would watch expenses.
Google added about 500 employees in the quarter, about half of them engineers, taking total staff to about 20,000, and the company said it would continue to hire cautiously.
But investors said Google appeared to be alone in its ability to weather the economic storm.
"Even in a down market, advertisers are going to be seeking customers. These results separate out Google from the eBays (EBAY.O) and the Yahoos (YHOO.O)," said Colin Gillis, an analyst at Canaccord Adams.
Net income for the third quarter rose to $1.35 billion, or $4.24 a diluted share, from $1.07 billion, or $3.38 per share.
Excluding employee stock compensation costs and one-time items, profit rose to $4.92 per diluted share and topped Wall Street's target of $4.75, according to Reuters Estimates.
Revenue, including commissions paid to affiliated advertising sites, totaled $5.54 billion, up 31 percent from the year-earlier quarter but up only 3 percent from the second quarter of this year. Forecasts had called for annual revenue growth to range from 26 percent to 37 percent. By comparison, revenue had risen 57 percent in the quarter a year earlier.
The company dramatically cut back on purchases of property and equipment to $452 million for the quarter ended in September from $697 million in the June quarter.
Google continues to throw off cash at one of the fastest rates in the Internet industry. It generated $1.73 billion in free cash flow in the third quarter, up 60 percent both from the year-earlier quarter and from the second quarter ended in June.
YouTube is now running ads against 90 percent of all the videos claimed by partners using its content identification tool, executives said.
Google's stock has fallen by more than half this year as the company's pay-per-click advertising format has become caught up in the year-long slump in the overall advertising market. The roughly 52 percent decline in Google shares compares to the 38 percent drop so far this year in the S&P 500 Index (.SPX).
Google shares hit an all-time high of $747 just under a year ago as investors calculated the value of the company's moves to expand into new advertising formats such as cellphones, radio, TV and display ads preferred by corporate marketers.
"The first half of the year you saw consumers pull back, the number of ads Google was showing was down. In the third quarter, that seemed to stabilize. If you could point to one underlying metric, that would be it. The ad coverage stabilized after dropping off this year," said Clayton Moran, an analyst at Stanford Financial Group.
Separately, in a good sign for technology, microchip maker Advanced Micro Devices Inc (AMD.N) posted quarterly results that were better than expected, sending shares up 10 percent to $4.53.
Shares of Google rose more than 10 percent to $390.30 in after-hours trade following the report, building further on a 4.1 percent gain in regular trading on Nasdaq, when it closed at $353.02 after a seesaw trading day.
"While it won't be immune from the economic downturn, the valuation is very competitive, and at the same time, Yahoo, its biggest competitor, is struggling. So from a competitive stance, they're great," said Greg Woodard, portfolio strategist at Manning & Napier Advisors, who added that many on Wall Street had expected the results to miss published analyst targets.
(Reporting by Eric Auchard, Gabriel Madway, Alexandria Sage in San Francisco and Yinka Adegoke in New York; Editing by Phil Berlowitz)
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