Google reported earnings after the stock market closed and said its 2Q earnings rose more than expected by 19%.
However the shares are down over 4% in after hour trading because, Google’s Internet ad sales grew at their slowest rate ever during a 2Q, and much of the increased profit was due to cost cutting. For instance, the company trimmed its general and administrative expenses by 23 percent to save about $110 million and reduced its spending on capital projects by 80 percent, or $559 million.
Here are the details you need to know:
For the quarter ended June 30, Google reported earnings of $1.48 billion, or $4.66 a share, compared with $1.25 billion, or $3.92 a share, a year ago. Excluding stock-based compensation, earnings rose to $5.36 a share from $4.63, surpassing the average analyst estimate of $5.09 on Thomson Reuters.
Revenue rose 2.9% to $5.52 billion.
Traffic-acquisition costs, commissions paid to marketing partners, including domainers, totaled $1.45 billion, or 27% of advertising revenue.
The company’s U.S. paid clicks, grew 15% from a year earlier, but were down 2% from the first quarter.
Meanwhile, cost per clicks, the amount of money an advertiser pays search engines for a single click, fell 13% from a year ago but rose 5% from the first quarter.