Google Reports: Paid Clicks Up 26%, Cost-Per-Click Drops 9%, Stock Down After Hours

google

Google reported it earnings after the market closed today for the quarter ending ending March 31

Google had $15.4 billion in revenue.

Net income was $3.45 billion, which amounted to earnings of $5.04 a share, or $6.27 a share excluding one-time charges.

While revenue rose 19% and profit was up 3%, that fell short of Wall Street’s projections. Analysts surveyed by Thomson Reuters were expecting, on average, earnings of $5.28 a share or $6.40 a share after excluding one-time charges, on revenue of $15.5 billion.

The stock was up $20.10 or 3.75 % during the trading day but has given most of it up after hours, down $17.

Although paid clicks were up 26% the Cost per Click was down again

You can check out this chart from Businessintelligence.com to see how Google cost per click has looked over the years:

googlecpc-5

Here are the Financial Highlights from the official press release:

Revenues and other information – Google Inc. revenues for the quarter ended March 31, 2014 were $15.42 billion, representing a 19% increase over first quarter of 2013 revenues of $12.95 billion.

  • Sites Revenues – Our sites generated revenues of $10.47 billion, or 68% of total revenues, in the first quarter of 2014. This represents a 21% increase over first quarter of 2013 sites revenues of $8.64 billion.
  • Network Revenues – Our partner sites generated revenues of $3.40 billion, or 22% of total revenues, in the first quarter of 2014.  This represents a 4% increase over first quarter of 2013 network revenues of $3.26 billion.
  • Other Revenues – Other revenues were $1.55 billion, or 10% of total revenues, in the first quarter of 2014.  This represents a 48% increase over first quarter of 2013 other revenues of $1.05 billion.
  • International Revenues – Our revenues from outside of the United States totaled $8.76 billion, representing 57% of total revenues in the first quarter of 2014, compared to 56% in the fourth quarter of 2013 and 55% in the first quarter of 2013.
    • Our revenues from the United Kingdom totaled $1.58 billion, representing 10% of total revenues in the first quarter of 2014, compared to 11% in the first quarter of 2013.
  • Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 26% over the first quarter of 2013 and decreased approximately 1% over the fourth quarter of 2013.
  • Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 9% over the first quarter of 2013 and remained constant from the fourth quarter of 2013.
  • TAC – Traffic acquisition costs, the portion of revenues shared with Google’s partners, increased to $3.23 billion in the first quarter of 2014, compared to $2.96 billion in the first quarter of 2013. TAC as a percentage of advertising revenues was 23% in the first quarter of 2014, compared to 25% in the first quarter of 2013.The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.39 billion in the first quarter of 2014. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $845 million in the first quarter of 2014.

Other Cost of Revenues – Other cost of revenues, which is comprised primarily of data centers operational expenses, hardware inventory costs, amortization of acquisition-related intangible assets, and content acquisition costs, increased to $2.73 billion, or 18% of revenues, in the first quarter of 2014, compared to $2.17 billion, or 17% of revenues, in the first quarter of 2013.

Operating Expenses – Operating expenses, other than cost of revenues, were $5.34 billion in the first quarter of 2014, or 35% of revenues, compared to $4.07 billion in the first quarter of 2013, or 31% of revenues.

Operating Income – GAAP operating income in the first quarter of 2014 was $4.12 billion, or 27% of revenues. This compares to GAAP operating income of $3.75 billion, or 29% of revenues, in the first quarter of 2013. Non-GAAP operating income in the first quarter of 2014 was $4.95 billion, or 32% of revenues. This compares to non-GAAP operating income of $4.40 billion, or 34% of revenues, in the first quarter of 2013.

Interest and Other Income, Net – Interest and other income, net, was $357 million in the first quarter of 2014, compared to $134 million in the first quarter of 2013.

Income Taxes – Our effective tax rate was 18% for the first quarter of 2014.

Net Income – GAAP consolidated net income in the first quarter of 2014 was $3.45 billion, compared to $3.35 billion in the first quarter of 2013. Non-GAAP consolidated net income was $4.30 billion in the first quarter of 2014, compared to $4.04 billion in the first quarter of 2013. GAAP EPS in the first quarter of 2014 was $5.04 on 685 million diluted shares outstanding, compared to $4.97 in the first quarter of 2013 on 673 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2014 was $6.27, compared to $6.00 in the first quarter of 2013.

Cash Flow and Capital Expenditures – Net cash provided by operating activities in the first quarter of 2014 totaled $4.39 billion, compared to $3.63 billion in the first quarter of 2013. In the first quarter of 2014, capital expenditures were $2.35 billion, the majority of which was for production equipment, data-center construction, and real estate purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the first quarter of 2014, free cash flow was $2.05 billion.

Cash – As of March 31, 2014, cash, cash equivalents, and marketable securities were $59.38 billion, which excludes cash classified as held for sale, compared to $58.72 billion as of December 31, 2013.

Headcount – On a worldwide basis, we employed 49,829 full-time employees (46,170 in Google and 3,659 in Motorola Mobile) as of March 31, 2014, compared to 47,756 full-time employees (43,862 in Google and 3,894 in Motorola Mobile) as of December 31, 2013.

 

Comments

  1. Louise says

    Good news for Google investors:

    On January 29, 2014, we entered into an agreement with Lenovo Group Limited providing for the disposition of the Motorola Mobile business. As such, financial results of Motorola Mobile are presented as “Net loss from discontinued operations” on the Consolidated Statements of Income for the quarter ended March 31, 2013 and 2014; and assets and liabilities of Motorola Mobile to be disposed of are presented as “Assets held for sale” and “Liabilities held for sale”, respectively, on the Consolidated Balance Sheet as of March 31, 2014.

    Google left room for better earnings on the next earnings report, when it adds income derived from the sale to Lenovo! No wonder Google was up $20.10 following the report.

    The Cost per Click was down again.

    Wonder if the China and India boiler room click factories are increasing their operations in behalf of the parking companies, which represent the lowest cost ad? That is why, CPC is down, but revenue is up.

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