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Google (GOOG) 4Q Earnings Up 6.6 Pct, Beat Estimates; Shares Rise

 January 22, 2013 04:34 PM

(By Balaseshan) Search engine giant Google Inc. (NASDAQ: GOOG) reported a 6.6 percent rise in quarterly earnings on a 36 percent revenue growth and greater momentum in products like Android, Chrome and YouTube. Results exceeded consensus, sending shares up 4 percent in aftermarket.

Google, which has been struggling to turn around its Motorola acquisition, has agreed with Arris Group, Inc. and certain other persons to dispose the Motorola Home business for about $2.35 billion in cash and stock. The transaction is expected to close in 2013. As a result, results related to the Home business are presented as net loss from discontinued operations.

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Profit increased 6.6 percent to $2.89 billion, while earnings per share (EPS) rose 4.9 percent to $8.62. Adjusted earnings grew to $3.57 billion, or $10.65 per share, from $3.13 billion, or $9.50 per share.

Revenue climbed 36 percent to $14.42 billion. Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.08 billion from $2.45 billion.

Analysts, on average, polled by Thomson Reuters had expected a profit of $10.52 per share on revenue of $12.36 billion for the fourth quarter.

Excluding gains related to foreign exchange risk management program, total revenue in the latest quarter would have been $193 million higher.

Motorola revenues were $1.51 billion, or 11 percent of consolidated revenues in the fourth quarter of 2012.

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Google-owned sites generated revenue grew 18 percent to $8.64 billion, while Google's partner sites revenue increased 19 percent to $3.44 billion. Revenues from outside of the United States totaled $6.9 billion, representing 54 percent of total revenue in the latest quarter.

Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of network members, increased about 24 percent, while average cost-per-click, which includes clicks related to ads served on Google sites and the sites of network members, decreased about 6 percent.

Total costs and expenses increased to $11.03 billion from $7.08 billion. Google's cost of revenue rose to $4.96 billion from $3.70 billion, while Motorola's cost of revenue was $1.25 billion for the latest quarter.

On a worldwide basis, Google employed 53,861 full-time employees (37,544 in the Google business, 11,113 in its Motorola Mobile and 5,204 in its Motorola Home businesses) as of December 31, 2012, compared with 53,546 full-time employees as of September 30, 2012.

Meanwhile, software major Microsoft Corp. (NASDAQ: MSFT) is set to release its second quarter results after the market closes Thursday. Street analysts are expecting Microsoft to earn $0.75 per share on revenue of $21.56 billion. In comparison, last year's reported earnings were $0.78 on revenue of $20.88 billion.

GOOG closed Tuesday's regular session down 0.23 percent at $702.87. The stock has been trading between $556.52 and $774.38 for the past 52 weeks.

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