Google Q4 ’13 Beats With $16.86B Revenue, Misses With EPS Of $12.01 Because Of Motorola Weakness

Google just published its Q4 earnings report and the results are mostly in line with Wall Street expectations, though it missed on earnings per share due to larger than expected losses at Motorola, which doubled from the year-ago-quarter.

Over the last three months, the company reported revenue of $16.86 billion and $3.37 billion in net income. Non-GAAP earnings per share came in at $12.01 and GAAP EPS was $9.90.

“We ended 2013 with another great quarter of momentum and growth.  Google’s standalone revenue was up 22 percent year on year, at $15.7 billion”, said Larry Page, CEO of Google in a statement today.  “We made great progress across a wide range of product improvements and business goals.  I’m also very excited about improving people’s lives even more with continued hard work on our user experiences.”

Ahead of the earnings release, most analysts expected the company’s earnings per share to increase about 16 percent thanks to better ad revenues on mobile and YouTube. The analyst consensus was that Google would report revenue of $16.75 billion (up 37.8 percent from the year-ago-quarter) and earnings per share of $12.26.

Last quarter, Google reported revenue of $14.89 billion and net income of $2.97 billion for an EPS of $10.74.

For the last three quarters in a row, Google beat Wall Street’s expectations in large part thanks to improved results from its AdWords Enhanced Campaigns. Overall, though, cost-per-click, one of Google’s key metrics to measure its advertising performance, has been trending lower, with a 4 percent decrease in Q3 and an 8 percent drop year-over-year. Paid clicks, on the other hand, increased 8 percent in Q3 and 26 percent year over year. This quarter paid clicks increased by 31 percent and cost-per-click decreased by just 2 percent.

Traffic acquisition costs increased to $3.31 billion in the fourth quarter, up from $3.08 million in the year-ago-quarter. This accounted for 24 percent of Google’s revenue, compared to 25 percent last year.


The last few weeks have been particularly interesting for Google. The company announced its $3.2 billion Nest acquisition and just yesterday (and surely timed to preempt today’s earnings release), it said that it would sell most of Motorola to Lenovo.

Motorola has been posting losses ever since Google acquired it in 2012. Last quarter it posted an operating loss of $248 million and this quarter it had revenues of $1.24 billion but lost 384 million.