Google expands revenue but misses forecast
Google's revenue and profit both increased but investors sent its stock 9% lower
IDG News Service - Google's fourth-quarter revenue climbed 25% from a year earlier but was less than analysts had expected, pulling its stock price down 9% in after-hours trading.
Google's revenue for the three months to Dec. 31 came in at $10.58 billion, up from $8.44 billion a year earlier, the company announced Thursday. Subtracting commissions and fees paid to partners, revenue was $8.13 billion, below the consensus analyst forecast of $8.41 billion, according to Thomson Reuters.
Its net income before one-time charges, at $9.50 a share, was also below the consensus estimate, which called for $10.50 a share.
Google's shares dipped 9% in after-hours trading, to $583.48 at the time of this report, as investors reacted to the news. Earlier, Google's stock ended the regular trading day up 1%, at $639.57.
CEO Larry Page was upbeat. "Google had a really strong quarter ending a great year," he said in a statement.
It's Google+ social networking service now has 90 million users, Page said, up from about 40 million when Google reported its third-quarter results a few months ago.
Android use is also growing, he said later on a conference call. There are 250 million Android devices in use, up 50 million from November, and 11 billion apps have been downloaded from the Android store, Page said. Google already makes money from Android through ad sales and sees "a lot of potential" to make more money in the future, he said.
Oracle also sees potential to make money from Android, however; it's accused Google of misusing patented Java technology in the mobile OS and is seeking billions of dollars in damages. Google denies any wrongdoing.
Google's ad revenue also increased. Display ads, not a strong point for the company traditionally, are now producing revenue at an annual rate of $5 billion, Page said. Paid clicks, a measure of how often people click on Google's ads, were up 34% year over year. But the average cost per click, or how much advertisers pay for those clicks, dropped by 8%, Google said.
Google shut down a dozen or more services last year, Page noted, which will help it to focus its business and "double down on really big bets" such as Chrome, Android and YouTube, Page said. It will keep developing new services, but instead of launching "hundreds" over the next few years, it may launch "just a few," he said.
- Aberdeen Group: Marketing Analytics for Manufacturing: Forging Customer Insights There are no recalls for poor marketing. Manufacturers need to get their customer intelligence and messaging right the first time. Learn how.
- The Brave New World of Customer-Centric Manufacturing The Unique Opportunity for Manufacturers to Better Understand their Consumers
- See the Possibilities Utilizing Data Visualization Do you simply want to collect data, or do you want to derive business insights from it? What if you could quickly and...
- SANS: Next-Generation Datacenters = Next-Generation Security This whitepaper takes a look at some new technology that may allow security teams to implement more flexible and capable protection models in...
- Is SQL Server AlwaysOn really as powerful? Tips and Tricks from the field With the introduction of AlwaysOn, Windows Clustering Services is now more critical than ever.
- What Does it Take to Deliver a Superior Customer Experience? The Two Top-Rated Online Retailers, B&H Photo and Crutchfield Electronics, Share Their Secrets Discuss practical CX tools and service methods such as contact center agents and the use of realtime speech analytics to help contact center... All IT Industry White Papers | Webcasts