Google Q2 profit beats expectations

Shares down more than 3% in after-hours trading

Google on Thursday posted fairly anemic second-quarter revenue growth but a profit that beat expectations. Investors, though, were selling shares in after-hours trading, knocking the stock down more than 3%.

Google CEO Eric Schmidt was ambiguous about the health of the economy at large and of online advertising, telling analysts on a conference call that it is "too early to tell" if an economic recovery is at hand.

He added: "We're not at the moment looking at that downward spiral that we thought we might see six months ago."

Google posted a profit of $1.48 billion, up from $1.25 billion in the year-ago quarter, on revenue that rose just under 3% to $5.52 billion.

Paid clicks, which measure how often Web surfers click on ads that run alongside Google's search results, increased 15% year-over-year but decreased 2% compared with the first quarter.