Alphabet, the new holding company for Google, last night introduced its first share buyback and beat Wall Street's profit forecast.
The company said it was helped by solid progress in mobile and video advertising and its stock rose to its highest-ever level in after-hours trading on Wall Street.
Revenue and profit well above analysts' average forecasts,along with the unexpected buyback, was welcomed by investors, who are now betting on further growth.
The results come at a pivotal time for the company as it navigates the transition from desktop to mobile, where ads are generally less profitable, while facing growing competition from rivals like Facebook.
At the same time, it is moving into a new corporate structure that will put more visibility on parts of Alphabet such as its secretive research arm, Google X.
Next quarter will be the first in which it reports results under that structure.
Company executives touted strength in mobile search for the strong results. "Search traffic on mobile phones have now surpassed desktop traffic worldwide," said Sundar Pichai, chief executive of Google Inc.
Shares of Alphabet rose almost 9% in after-hours trading to $741, easily a record. At that level, the company's market value would be around $500 billion, making it the second-most valuable company in the S&P 500 after Apple.
On a strong day for technology companies, Amazon.com and Microsoft shares also rose sharply after hours, following better-than-expected results.
Third-quarter revenue rose 13% to $18.68 billion,above the $18.53 billion that Wall Street expected, according to Thomson Reuters I/B/E/S.
Excluding one-time items, the company earned $7.35 pershare, up 17.6% from the year before. That was ahead of analysts' average estimate of $7.21 per share.
Expenses rose 9.1% to $13.97 billion but were 74.7% of total revenue, compared to 77.4% in the same quarter last year, reflecting new Chief Financial Officer Ruth Porat's tight rein on spending.
