After the market closed today, Google posted a 23% gain in 1st Q revenue and a 37% increase in earnings.

Google posted net income of $1.96 billion, or $6.06 a share, up from $1.42 billion, or $4.49 a share, in the year-earlier period.

Revenues in the 1st quarter totaled $6.77 billion, compared with $5.51 billion in the year-ago period.

Net revenue, (after payouts to partners only increased 2.2% to $5.06 billion.

The street was disappointed.

Shares of Google are down $30 a share or over 5% to $565 after hours.

“””Google’s results were consistent with our expectations, said Kaufman Brothers Chairman and Chief Executive Benny Lorenzo. Yet he noted that the company’s costs grew significantly in the quarter.”

“That’s probably why the shares are selling off a bit,” he said.

The company hired 786 employees in the period, bringing its total to 20,621 at the end of March and marking its largest quarterly increase in staffing in two years.

Google’s rate of paid clicks rose 15% from the same quarter last year.

Prices paid for those clicks to Google in the first quarter rose 7% compared with the same period last year.

Yet the shares are down $30.

Wall Street go figure