Internet search giant Google, Inc. (GOOG) posted a huge 3rd quarter earnings surprise after the closing bell Thursday, with GAAP earnings of $6.72 per share on net revenues of $5.48 billion. These results far outpaced the Zacks Consensus Estimates of $5.93 per share on $5.285 billion in revenue, respectively. We rely on the GAAP earnings since it accounts for the company’s stock-based compensation, the same as in the Zacks Consensus Estimate.

GAAP net income in the quarter increased to $2.17 billion in the 3rd quarter of 2010 from $1.64 billion in the year-ago quarter for a very impressive 32% gain. GAAP EPS of $6.72 beat 3rd quarter 2009’s $5.13 per share by 31%. Google-owned websites grew 22% year over year, generating $4.83 billion in the quarter, up from $3.96 billion.

Analysts had shown increased positivity regarding Google’s 3rd quarter within the last week, as 5 analysts (17% of those covering GOOG) had upwardly revised earnings estimates over the past 7 days. This bumped up the Zacks Consensus Estimate 5 cents to $5.93, but was still shy of the initial 3rd quarter consensus of $6.06. Google’s positive earnings surprise in the quarter was 11%, the biggest beat from Google in the past 5 quarters.

Leading up to the earnings report, investors had been a tad trepidatious before the bell, sending shares down 0.44% to $540.93. But after the big homerun, GOOG shares released the fireworks and have shot up over 9% in the after-market — a more than $50 per share increase.

Traffic Acquisition Costs, or TAC, jumped 16% to $1.81 billion in the quarter compared to a year ago. Average cost-per-click on Google-owned sites rose 3% year over year and 2% sequentially.

CEO Eric Schmidt had plenty to crow about, especially in light of Google’s earnings miss in the 2nd quarter. He cited momentum in the company’s display and mobile businesses, and said, “Going forward, we remain committed to aggressive investment in both our people and our products as we pursue an innovation agenda.”

We will provide an in-depth report on Google’s earnings story Friday morning.
 
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