Google, Inc. (GOOG) reported solid first quarter 2010 results after the bell, but it appears the market is unimpressed. After an initial 17% drop in after-market trading, GOOG shares have gained back a good portion of that, but remain about 4.6% down after hours.

Once again, Google has handily beat consensus estimates in its report. Earnings per share on a GAAP basis reached $6.06, easily topping the Zacks Consensus Estimate of $5.82. (The Zacks Consensus Estimate accounts for stock-based compensation expense.) Net revenue, which strips out traffic acquisition costs (TAC), reached $5.06 billion.

Revenue from outside the U.S. accounted for 53% of the total, unchanged from the fourth quarter 2009, but up from 52% in the year-ago quarter. It will be interesting to watch how the Internet search giant’s international growth trajectory evolves, given its recent clash with the Chinese government.

The operating margin improved from the year-earlier level, with GAAP operating margin of 37%, up from 34% in the first quarter of 2009. Google generated approximately $2.6 billion in net cash from operating activities, up from approximately $2.3 billion in the year-earlier quarter. Free cash flow, which is essentially operating cash flow less operating expenditures, totaled $2.35 billion in the quarter. At the end of the quarter, GOOG had a cash stockpile of $26.5 billion sitting on its balance sheet.

This report follows a strong succession of upwardly revised estimate revisions for Google’s fiscal first quarter. Seven of 28 analysts covering GOOG stock had increased estimates within the past 30 days, and with notable magnitude — the Zacks Consensus Estimate 90 days ago stood at $5.57 per share and had gained 25 cents to $5.82 per share before the company’s report. Even with the surge in upward revisions, Google beat by 4%.

Google also keeps up an impressive streak of positive earnings surprises. In each of the prior four quarters GOOG had posted a positive surprise, with an average earnings beat of 11.7% over that time frame.

Estimates for fiscal 2010 have also surged in the past month, with 8 analysts having upwardly revised estimates. The Zacks Consensus Estimate for full-year 2010 is $24.39 per share.

We will have a more thorough report on Google earnings before the bell Friday.
Read the full analyst report on “GOOG”
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