Google Inc. on Thursday reported that its first-quarter net income increased by 18 percent compared to the same period of last year, but the number is still below analysts' estimates.
The Internet search giant's net income was 2.3 billion U.S. dollars, compared to nearly 2 billion dollars a year ago. Its revenues reached nearly 8.6 billion dollars, up 27 percent compared to the first quarter of 2010.
Google reported a profit of 7.04 dollars per share, lower than expectations. Analysts, polled by Thomson Reuters, estimated the company would have earnings per share of 8.10 dollars.
Google said that operating expenses were 2.84 billion dollars in the first quarter, accounting for 33 percent of its revenues, compared with 1.84 billion or 27 percent of revenues a year ago.
Investors and industry watchers have been concerned about Google's recent hiring spree and increased operating expenses, which could offset its growth.
Chief Financial Officer Patrick Pichette defended the spending in a statement. He said: "These results demonstrate the value of search and search ads to our users and customers, as well as the extraordinary potential of areas like display and mobile. It's clear that our past investments have been crucial to our success today -- which is why we continue to invest for the long term."
The quarterly financial report came less than two weeks after the company's co-founder Larry Page took over the reins as the CEO.
