Google's 1Q EPS Easily Beats Estimates; Revenue Trails Views

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Published April 18, 2013

| FOXBusiness

Google (GOOG) revealed a big earnings beat on Thursday thanks to a 20% leap in paid clicks, but the tech titan’s revenue narrowly trailed Wall Street’s hopes.

Shares of Google initially rallied more than 2% in after-hours trading but those gains quickly faded. 

Google said it earned $3.35 billion, or $9.94 a share, last quarter, compared with a profit of $2.89 billion, or $8.75 a share, a year earlier.

Excluding one-time items like stock compensation, the company earned $11.58 a share, easily trumping the Street’s view of $10.66. 

Consolidated revenue jumped 31% to $13.97 billion, missing consensus calls from analysts for $14.31 billion.

“We are working hard and investing in our products that aim to improve billions of people's lives all around the world,” Google CEO Larry Page said in a statement.

Google’s results were highlighted by a 20% increase in paid clicks from the year before. Paid clicks were also up 3% from the fourth quarter.

On the other hand, cost-per-click decreased 4% year-over-year and sequentially.

Google said its traffic acquisition costs, which are the portion of revenues shared with partners, rose to $2.96 billion in the first quarter from $2.51 billion the year before. As a percentage of ad revenue, TAC was unchanged at 25%.

Google said its sites generated revenue of $8.64 billion last quarter, up 18% from the year before. The company's network revenue, which measures partner site revenue, gained 12% to $3.26 billion.

International revenue totaled $7.1 billion, making up 55% of total Google revenue, compared with 54% the year before.

Operating expenses jumped to $4.55 billion in the first quarter from $3.47 billion the year before. As a percentage of revenue, expenses were unchanged at 33%.

Headcount also remained stable at Google, ticking up to 53,891 full-time employees from 53,861 the year before.

The company’s recently-acquired Motorola Mobile division posted a GAAP operating loss of $271 million last quarter. The unit’s $1.02 billion in revenue represents 7% of total consolidated revenue.

At first glance Wall Street applauded the results, driving Mountain View, Calif.-based Google up 2.05% to $781.04 in after-hours trading on Thursday.

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