REUTERS

(REUTERS)

Google 4Q Disappoints as Costs Rise

By Technology FOXBusiness

Google (GOOGL) on Thursday reported a 41% increase in fourth-quarter earnings, but the results fell short of Wall Street expectations amid higher costs.

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The search giant earned $4.76 billion, or $6.91 a share, up from $3.38 billion, or $4.95 a share, in the same period a year earlier. Excluding one-time items, adjusted earnings climbed 18 cents to $6.88 a share.

Revenue grew 15% to $18.1 billion. Google booked $12.43 billion in revenue from its websites, including search advertising. That reflects an increase of 18%. The network business generated $3.72 billion in revenue, up 6%.

Analysts projected a stronger adjusted profit of $7.11 a share and total revenue of $18.46 billion.

Google shares fell 2.4% to $500.65 in after-hours trading. As of Thursday’s close, the stock has fallen 3.3% on the year.

Wall Street has been closely watching how Google capitalizes on the increasing popularity of mobile devices. While smartphones have lifted ad clicks, mobile ads typically cost less.

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Google said prices paid for each ad click during the fourth quarter fell 3% year-over-year. Total ad clicks across Google’s portfolio of sites increased 14%.

Traffic acquisition costs, the portion of revenue that Google shares with partners, widened to $3.62 billion from $3.31 billion. Excluding those costs, quarterly revenue came in at $14.48 billion, missing FactSet’s estimate of $14.74 billion.

Operating expenses were up 35% at $6.78 billion.

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