(RTTNews) - Internet and search engine giant Google Inc. (GOOG: News ) Thursday said its second quarter profit increased from last year, despite the slowest revenue growth rate in its 19 quarters as a public company. Google's quarterly adjusted earnings came in ahead of analysts' expectations as did quarterly revenue. Following the news, the company's shares lost more than 3% in the after-hours, indicating investor disappointment over the results.

The Mountain View, California-based company reported net income on a GAAP basis of $1.48 billion or $4.66 per share for the second quarter of 2009, up from $1.25 billion or $3.92 per share in the prior year quarter.

Excluding items, net income on a non-GAAP basis grew to $1.71 billion or $5.36 per share from $1.47 billion or $4.63 per share in the year-ago quarter. On average, 33 analysts polled by Thomson Reuters expected the company to earn $5.09 per share for the second quarter. Analysts' estimates typically exclude one-time items.

GAAP operating income for the second quarter of 2009 was $1.87 billion, or 34% of revenues, compared to $1.58 billion, or 29% of revenues, in the previous year quarter.

Non-GAAP operating income was $2.17 billion, or 39% of revenues, compared to $1.85 billion, or 34% of revenues, in the second quarter of 2008.

Commenting on the results, Eric Schmidt, CEO of Google observed, "These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs."

Second quarter gross revenues increased 3% to $5.52 billion from $5.37 billion in the same quarter last year. Excluding traffic acquisition costs, revenue rose 4.4% to $4.07 billion from $3.90 billion a year earlier. Thirty-one analysts had a consensus revenue estimate of $4.06 billion for the second quarter.
Compared to last year, Google's gross revenue increased only 3%, while revenue, excluding traffic acquisition costs, posted a 4.4% growth, by far the slowest growth rate in its 19 quarters as a public company.

Google-owned sites generated revenues that rose 3% to $3.65 billion, or 66% of total revenues for the second quarter.

Revenues from Google's partner sites, which is run through AdSense programs, grew 2% to $1.68 billion, representing 31% of total revenues.

International revenues totaled $2.91 billion, representing 53% of total revenues in the second quarter of 2009, compared to 52% in the first quarter of 2009 and second quarter of 2008. Excluding gains related to foreign exchange risk management program, the company's revenues would have been $44 million lower in the second quarter of 2009.

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