In her much-awaited first remarks to investors on Thursday, Google Inc finance chief Ruth Porat stressed keeping expenses under control, which helped send the company's stock to record highs in after-hours trading.
In her much-awaited first remarks to investors on Thursday, Google Inc finance chief Ruth Porat stressed keeping expenses under control, which helped send the company’s stock to record highs in after-hours trading.
Porat joined Google in May after serving as Morgan Stanley’s chief financial officer for five years. Analysts and investors hoped she would help rein in costs from non-profitable projects such as those from the Google X lab, which has experimented with Google Glass and the self-driving car.
Google’s shares started rising after the company reported higher-than-expected earnings for the first time in six quarters.
Also boosting the stock were Porat’s comments in a prepared statement that said the company was focused on developing “big new opportunities” while doing so “with great care regarding resource allocation.”
Before the call, shares were up roughly 7 percent. In the course of the call the shares rose roughly 12 percent. Late in the day shares were up a little over 11 percent, at $671, after closing at $601.78 on the Nasdaq.
That would represent an all-time high for the stock in regular trading if it closes at that level on Friday, adding roughly $40 billion to its market value.
On the analyst call, Porat continually emphasized operating costs that were growing more slowly and declining expenses that reflected increased discipline in the managing of expenses.
“The profitability of our business gives us many opportunities, but the main point is today the biggest return on investment has been in our core search business,” Porat said.
Analysts said Google has made it clear in recent quarters that it would work to tighten spending but that Porat’s comments indicated she would help push the company to control costs further.
“She will likely look at ways to optimize that, particularly as new products and emerging products grow,” said Kerry Rice, analyst at Needham & Co, adding that Porat would be able to help incrementally improve Google’s cost control measures.
Porat also told investors and analysts, “I am committed to being direct with you.”