Google Misses in Q1 With Revenue Of $15.42B, EPS Of $6.27 As Its Cost-Per-Click Fell 9%

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Following the bell, Google reported its first quarter financial performance, including revenue of $12.20 billion excluding traffic acquisition costs (ex-TAC), $15.42 billion including those costs, and earnings per share of $6.27. Analysts and investors had expected Google to earn $6.40 on revenue of $12.25 billion (ex-TAC), or $15.54 billion including traffic costs.

Keep in mind that Google’s earnings per share around half of what they were before due to the company’s recent stock split.

Google’s revenue was up 19% year-over-year. Its GAAP operating revenue totaled $4.12 in the period, or 27% of its total revenue.

In regular trading, Google rose around 4%, beating an up market. In after-hours trading, after its earnings miss, Google is down more than 4%. In the sequentially preceding quarter, Google had seasonally boosted revenue of $16.86 billion (not excluding TAC) and GAAP earnings per share of $9.90.

In the first quarter, Google had GAAP net income of $3.45 billion. For the period, Google’s earnings were 57% derived from the United States, up 1% from the year-ago quarter.

Traffic acquisition costs, a key metric for Google, totaled $3.23 billion in the quarter, or 23% of the company’s revenue for the period. That compares to its fourth quarter percentage of 23.5% in the sequentially preceding quarter, and 24.9% in the year-ago quarter.

For the period, Google’s recorded cost-per-click average rate fell 9%. Total paid clicks rose 26% year-over-year. The 26% gain, of course, overshadows the per-click decline, but the trend is pretty clear: Google can’t charge what it once did for paid clicks. Still, the per-click decline contributed to Google’s reporting lesser earnings than was expected.

Finally, Google’s “Net Loss from Discontinued Operations,” which includes the dispossessed Motoroal arm of the company, totaled $198 million in the period. That figure was up from $182 million in the year-ago period.

All told, Google did not meet market expectations, despite delivering a healthy quarter. The company continues to grow at double-digit rates. However, with a trailing PE ratio north of 30, the market simply expected more.

IMAGE BY FLICKR USER Kenneth Lu UNDER CC BY 2.0 LICENSE (IMAGE HAS BEEN CROPPED)