Google announced its mixed Q2 results tonight along with news that its longtime Chief Business Officer, Nikesh Arora, plans to leave to become CEO of SoftBank Internet and Media. He’ll be replaced by Omid Kordestani, one of Google’s founders.
Net income for the quarter came in at $3.42B, +6% vs the period last year, on revenues of $16.0B, +21.7%. The top line beat analysts’ consensus forecast of $15.6B. But earnings at $6.08 a share, not including one-time expenses, fell short of the Street’s prediction of $6.25.
Paid clicks on Google ads increased 25% vs last year. But the cost per click fell 6%. Also, traffic-acquisition costs increased 9.3%, to $3.3B while other costs rose 29.4% to $2.82B.
Google execs usually offer little color about the quarter in their earnings releases, and this time was no exception. “We are moving forward with great product momentum and are excited to continue providing amazing user experiences, with a view to the long term,” CFO Patrick Pichette says.
The stock is down about 5.6% in post market trading on the disappointing results, which include a 9% year over year drop in the average cost per click. The search giant reported net income of $3.45B, +3.2% vs the first three months of 2013, on revenues of $15.42B, +19.1%. If you factor out the impact from the sale of the Motorola Mobile business to Lenovo Group then earnings per share would have come in at $6.27, below the $6.33 that the Street anticipated. Revenues also were lower than the $15.51B analysts expected. Google says that revenues from its sites improved 21% to $10.47B while partner sites were +4% to $3.4B. But revenue costs, primarily for the data centers, jumped 25.8% to $2.73B while operating expenses were +31.2% to $5.34B. Per usual, CEO Larry Page had little to say in the company release: He noted that “We got lots of product improvements done, especially on mobile. I’m also excited with progress on our emerging businesses.”
Now we can see why Google picked yesterday to announce the sale of its Motorola Mobility smartphone business to Lenovo. If it hadn’t, then the search giant likely would be bombarded by questions about its new Q4 report showing that the unit lost $384M, up from its $152M loss in the same period last year. The rest of the report is much less troublesome, resulting in a 4.5% increase in the company’s stock price in after-market trading. Google generated net income of $3.38B, +17% vs Q4 in 2012, on revenues of $16.86B, +16.9%. The revenue number beat Wall Street’s forecasts for $16.75B. But adjusted earnings per share, at $12.01, missed predictions for $12.26. Gross ad sales improved 16.5% to $14.07B, as the number of paid clicks increased 31% from the end of 2012. But the cost per click dropped 11%. Even so, CEO Larry Page says that the company “made great progress across a wide range of product improvements and business goals.” He added that he’s “very excited about improving people’s lives even more with continued hard work on our user experiences.”
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UPDATE: 2:58 PM: Google will “look at the possibility of expanding” the company’s Google Fiber super high-speed broadband initiative in Kansas City, CFO Patrick Pichette told analysts in a conference call. “We are really excited about this product, and it’s been a success overall. It’s not a hobby.” But before offering the broadband, video and voice service in additional cities “we have to really nail Kansas City,” he says. Google Fiber offers users two-way Internet speeds of about 1 gigabit per second. That’s far faster than cable services, which typically provide about 6 megabits per second downloads and much slower upload speeds.
PREVIOUS, 1:10 PM: Shares are up 3.6% in after hours trading following disclosure of the solid results. Not including Motorola Home, which Google recently agreed to sell, the search giant generated Q4 net income of $2.89B, up 6.7% vs the same period last year, on revenues of $14.42B, +36.2%. Analysts expected revenues of $12.36B. Not including one-time events, earnings came in at $10.65 a share, beating the consensus forecast for $10.52. Ad sales at company-owned sites increased 18% to $8.64B while sales are partner sites was up 19% to $3.44B. The number of paid clicks was +24% from a year ago, but the average cost per click declined 6%. “In today’s multi-screen world we face tremendous opportunities as a technology company focused on user benefit,” CEO Larry Page says. Execs typically hold their most interesting insights … Read More »
Google shares are up about 3% in after-market trading following the release of the Q2 earnings — which are complicated by the May 22 acquisition of Motorola Mobility. With that included, Google reports net income of nearly $2.8B, up 11.2% vs the period last year, on revenues of $12.2B, +35.3%. Without Motorola, Google’s revenues would be nearly $11B — still well ahead of the $8.4B that the Street forecast. About 54% of the revenues came from outside the U.S. Also excluding Motorola, earnings per share came in at $10.12, beating expectations for $10.04. The company reports that the number of paid clicks on its sites, and those of its network members, grew 42% vs last year’s Q2. CEO Larry Page says that Google’s recently released Nexus 7 tablet “has received rave reviews.” With Motorola, “we’re excited about the potential to build great devices for users.”
The search giant generated $2.73 billion in net income, up 25.8% vs the same period last year, on revenues of $9.72B, up 33%. Not including some one-time expenses, earnings came in at $9.72 a share, handily beating Wall Street’s estimate of $8.74. The sites that Google owns accounted for 69% of its revenue. CEO Larry Page says that Google+ is thriving with 40M users. He added that he’s “super excited about the soon-to-be-released new version of Android called Ice Cream Sandwich” which will make it possible for Android apps to work both on smartphones and tablets. Meanwhile, CFO Patrick Pichette said that with the general economy, “what we’re seeing is not terribly surprising or different from what you’re all seeing watching on TV and reading in the press … and that’s why we will as always stay focused on what we control.”
The leading Internet search company says its 2Q net income of $2.5 billion is up 36.1% vs the same period last year on revenues of $9 billion, up 32%. Earnings, at $8.74 a share not counting employee stock costs, handily beat analyst expectations of $7.84. Most of the growth came from ad sales at Google-owned sites, including YouTube. CEO Larry Page didn’t say much about the financials in the announcement, apparently concluding it was more important to disclose that he’s “super excited about the amazing response to Google+”, the company’s new social-network service. The Street will be more interested in hearing about Google’s investment plans — and the status of the FTC inquiry into the company’s search and ad business practices.