Updated from 8:44 a.m. EDT to provide commentary about $1,000 share price and additional analyst comments from RBC Capital Markets.
Paid clicks -- which include clicks related to ads served on Google sites and the sites of Network members, soared, rising approximately 26% year-over-year and 8% sequentially. That helped the company generate $10.74 per share in earnings on $11.93 billion in revenue, excluding traffic acquisition costs (TAC). Analysts surveyed by Thomson Reuters expected Google to earn $10.34 per share on $14.79 billion in revenue, including TAC, during the quarter.
On the company conference call, which may be CEO Larry Page's last for a while, Google noted that YouTube is now a mobile behemoth, seeing almost 40% of its traffic coming from mobile devices. That's up from 6% just two years ago, as people watch more and more video on their mobile devices.Google shares breached the $1,000 mark in early Friday trading, climbing more than 13.9% to $1,007.12 as of 10:10 a.m. Google touched on Enhanced Campaigns, its initiative to have advertisers buy advertising catered towards multi-screen experiences, as opposed to buying separately for desktop and mobile. Nikesh Arora, Google's Senior Vice President and Chief Business Officer, said Enhanced Campaigns are seeing "great progress," but did not give anything quantitative on it. This comes as cost-per-click (CPC), a key advertising metric, continued to trend lower. CPC fell 8% year-over-year, and 4% sequentially. Shares surged, hitting an all-time high following the report and conference call, tacking on 9.9% to $976.70 in early Friday trading. Analysts across Wall Street were sharply raising price targets on the Internet giant. Here's what a few of them had to say. Jefferies analyst Brian Pitz (Buy, $1,150 PT) "We see three reasons why GOOG remains a must-own stock: 1) YouTube is best positioned vs. large online video oppty including TV budgets shifting online; 2) Enhanced Campaigns means marketers can easily run multi-screen ad campaigns (PC, tablet, mobile) - a key advantage for GOOG; 3) GOOG is best positioned in mobile with 1B Android activations, and should benefit as CPCs rise." Canaccord Genuity analyst Michael Graham (Buy, $1,000 PT) "Google reported solid Q3 results that beat consensus for revenue and EPS by a few percent despite intra-quarter concerns that the rollout of Enhanced Campaigns would negatively impact advertiser behavior in the quarter. Websites revenue growth accelerated despite continued CPC shrinkage and made up for a big deceleration in Network revenue. With many investors already expecting a strong Q4 from EC impact, getting past this potentially bumpy Q3 with a solid set of results should allow the stock to work well through year-end." JPMorgan analyst Doug Anmuth (Overweight, $1,100 PT) "Google reported better than expected 3Q results as strength in Google Sites and International drove Google Segment net revenue 2.3% above our estimate and led to Google's first consensus revenue beat in 8 quarters. Enhanced Campaigns does not appear to have had a material impact on 3Q results either way, but we believe it represents a major opportunity going forward as usage pushes toward mobile and advertisers increasingly utilize bid modifiers and cross-device analytics." Cantor Fitzgerald analyst Youssef Squali (Buy, $1,175 PT) "We are reiterating our BUY rating and raising our PT to $1,175 on GOOG after solid 3Q:13 results and prospects for continued strength. Core Google segment revenues maintained an impressive +19% Y/Y growth rate, driven by strength in paid clicks, international and YouTube, despite headwinds from lower network revenues, lower CPCs and increased investments. Google remains one of the best plays on growth in online advertising at a valuation we still find compelling, in our view." RBC Capital Markets analyst Mark Mahaney (Outperform, $1,100 PT) "- Consolidated Revenue of $14.89B beat RBC/Street, with Non-GAAP EPS of $10.74 also beating RBC/Street. Both Core GOOG and MMI beat top-line expectations, with Core GOOG (up 21% Y/Y) seeing strength @ Google Sites, Int'l Mkts, YouTube, and Core Search. While MMI Operating Losses continue to mount, Core GOOG Operating Margin expanded Q/Q for the first time since Q4:11." -- Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia