Google takes hit on growth disappointment (Update)

Google takes hit on growth disappointment (Update)3 hours ago by Sophie Estienne

The Google offices in Brussels on February 5, 2014

Google lost some of its luster Wednesday as quarterly results failed to meet lofty Wall Street expectations, sending its shares down sharply.

The California tech giant said its first quarter profit rose 32 percent from a year ago to $3.45 billion.

Chief executive Larry Page hailed "another great quarter" for Google, with revenue of $15.4 billion, up 19 percent year on year.

"We got lots of product improvements done, especially on mobile. I'm also excited with progress on our emerging businesses," Page said in a statement.

But Google shares tumbled 2.8 percent in after-hours trade to $540.49.

Earnings per share amounted to $6.27 compared with analyst projections of $6.40. Analysts also expected a higher revenue figure of $15.5 billion.

Google remains the world's most important search engine, which generates large amounts of advertising revenues. But it is increasingly focusing on the Android mobile system and new technologies, highlighted by its recent acquisitions of the home automation firm Nest Labs and drone maker Titan Aerospace.

The earnings report showed a 26 percent rise in "paid clicks," a key figure for Google's advertising and revenues—growth slightly lower than the 29 percent expected by analysts.

The price per click fell one percent in the quarter and nine percent over the past year. Analysts say this reflects a growing move to smartphones, where clicks produce lower revenues than on traditional PCs.

"It's costing Google more to acquire content and maintain its data centers," said Paul Ausick at 24/7 Wall Street.

"This state of affairs is going to weigh down the stock price."

Google's chief financial officer Patrick Pichette said the results were impacted to some degree by some major acquisitions and the spin-off of its Motorola smartphone unit, which is being sold to China's Lenovo.

But he added that the expenses in the quarter "were completely in line with our objectives."

Pichette noted that Google broke off the results from Motorola as it prepares to sell the division, but that the 3,700 employees remained in the Google headcount of nearly 50,000 employees.

Google ended the quarter with $59.4 billion in cash, up from $58.7 billion at the close of the prior quarter.

Google has plans that include smart home thermostats, Internet connected eyewear, and making Android smartphones and tablets with partners.

"Our business is growing well," said Google senior vice president and chief business officer Nikesh Arora during the company's earnings call.

Arora said Google is trying to position itself for a "multiscreen" environment where people use various devices to access the Internet.

"People are always online and they want a seamless experience as they move from screen to screen," he said.

Earlier this year, Google announced a deal for smart thermostat start-up Nest in an accord valued at $3.2 billion. It also bought drone maker Titan for an undisclosed price, and gaming startup Green Throttle.

It agreed to sell Motorola to Lenovo for $2.91 billion, after a lackluster two-year effort to turn around the smartphone maker it bought for $12.5 billion.

Explore further:Yahoo sees signs of growth in 'core' (Update)

© 2014 AFP

More from Physics Forums - General Engineering

Related Stories

Yahoo sees signs of growth in 'core' (Update)

Apr 15, 2014

Yahoo reported a stronger-than-expected first-quarter profit Tuesday, results hailed by chief executive Marissa Mayer as showing growth in the Web giant's "core" business.

Google profit rises 16%, short of forecasts

Jul 18, 2013

Google said Thursday its second-quarter profit rose 16 percent from a year ago, but its results fell far short of market expectations.

Google, Facebook drive gains in mobile advertising (Update)

Mar 19, 2014

The market for mobile device advertising doubled in 2013 to $17.9 billion and is on pace for strong gains this year, led by Facebook and Google, a market tracker said Wednesday.

EMarketer sees 2014 mobile ad spending at $31.5B

Mar 19, 2014

Worldwide spending on mobile advertising is expected to reach $31.5 billion this year, a 75 percent increase from 2013 thanks largely to Facebook and Google, according to a new report by research firm eMarketer.

Google shares soar past $1,000 on strong earnings

Oct 18, 2013

Shares of Internet search and advertising titan Google soared more than 13 percent to pass the $1,000 mark for the first time Friday after a strong earnings report.

IBM posts higher 4Q net income (Update)

Jan 21, 2014

IBM's fourth-quarter net income grew 6 percent, surpassing Wall Street's expectations even though revenue fell. Its shares fell in extended trading after the results came out—and CEO Ginni Rometty said she's recommending ...

Recommended for you

IBM posts lower 1Q earnings amid hardware slump

2 hours ago

IBM's first-quarter earnings fell and revenue came in below Wall Street's expectations amid an ongoing decline in its hardware business, one that was exasperated by weaker demand in China and emerging markets.

Alibaba steals Yahoo's thunder ahead of IPO

8 hours ago

If Yahoo appears back in favor, it can thank Alibaba, the Chinese Web giant in which it holds a big stake and which is set for a public stock offering.

New US-Spanish firm says targets rich mobile ad market

9 hours ago

Spanish telecoms firm Telefonica and US investment giant Blackstone launched a mobile telephone advertising venture on Wednesday, challenging internet giants such as Google and Facebook in a multi-billion-dollar ...

Technip, Heerema win third giant Angolan oil contract

12 hours ago

The ultra-deep Angolan offshore oil project called Kaombo generated the third huge contract in three days on Wednesday when French group Total picked two firms to carry out underwater engineering worth $3.5 billion.

MtGox gives up rebuilding under bankruptcy protection: report

12 hours ago

Failed Bitcoin exchange Mt Gox has given up its plan to rebuild under bankruptcy protection and has asked a Tokyo court that it be liquidated, Dow Jones Newswires reported Wednesday.

Bitcoin exchange MtGox in administration, bankruptcy eyed (Update)

13 hours ago

A Japanese court Wednesday placed failed Bitcoin exchange MtGox in administration, with an order for bankruptcy expected to be issued soon, its administrator and chief executive said.

User comments : 0

More news stories

Simplicity is key to co-operative robots

A way of making hundreds—or even thousands—of tiny robots cluster to carry out tasks without using any memory or processing power has been developed by engineers at the University of Sheffield, UK.

Microsoft CEO is driving data-culture mindset

(Phys.org) —Microsoft's future strategy: is all about leveraging data, from different sources, coming together using one cohesive Microsoft architecture. Microsoft CEO Satya Nadella on Tuesday, both in ...

Computer software accurately predicts student test performance

Emotient, the leading provider of facial expression recognition data and analysis, and the University of California, San Diego announced publication of a joint study by two Emotient co-founders affiliated ...

IBM posts lower 1Q earnings amid hardware slump

IBM's first-quarter earnings fell and revenue came in below Wall Street's expectations amid an ongoing decline in its hardware business, one that was exasperated by weaker demand in China and emerging markets.

Canada police nab young man in Heartbleed data theft

Federal police said Wednesday they have arrested and charged a 19-year-old man in the theft of 900 Canadian taxpayers' data, which was made vulnerable by the "Heartbleed" bug.

Creative activities outside work can improve job performance

Employees who pursue creative activities outside of work may find that these activities boost their performance on the job, according to a new study by San Francisco State University organizational psychologist Kevin Eschleman ...

Scientists capture ultrafast snapshots of light-driven superconductivity

A new study pins down a major factor behind the appearance of superconductivity—the ability to conduct electricity with 100 percent efficiency—in a promising copper-oxide material.

Micro-macro entangled 'cat states' could one day test quantum gravity

(Phys.org) —In Schrödinger's famous thought experiment, a cat's quantum state becomes entangled with the quantum state of a decaying nucleus, resulting in the odd situation that the cat is both alive and ...

Chemical vapor deposition used to grow atomic layer materials on top of each other

Researchers at Penn State's Center for Two-Dimensional and Layered Materials and the University of Texas at Dallas have shown the ability to grow high quality, single-layer materials one on top of the other ...

Down's chromosome cause genome-wide disruption

The extra copy of Chromosome 21 that causes Down's syndrome throws a spanner into the workings of all the other chromosomes as well, said a study published Wednesday that surprised its authors.

Javascript is currently disabled in your web browser. For full site functionality, it is necessary to enable Javascript. In order to enable it, please see these instructions.

© Phys.org™ 2003-2013, Science X network

Google takes hit on growth disappointment (Update)3 hours ago by Sophie Estienne

The Google offices in Brussels on February 5, 2014

Google lost some of its luster Wednesday as quarterly results failed to meet lofty Wall Street expectations, sending its shares down sharply.

The California tech giant said its first quarter profit rose 32 percent from a year ago to $3.45 billion.

Chief executive Larry Page hailed "another great quarter" for Google, with revenue of $15.4 billion, up 19 percent year on year.

"We got lots of product improvements done, especially on mobile. I'm also excited with progress on our emerging businesses," Page said in a statement.

But Google shares tumbled 2.8 percent in after-hours trade to $540.49.

Earnings per share amounted to $6.27 compared with analyst projections of $6.40. Analysts also expected a higher revenue figure of $15.5 billion.

Google remains the world's most important search engine, which generates large amounts of advertising revenues. But it is increasingly focusing on the Android mobile system and new technologies, highlighted by its recent acquisitions of the home automation firm Nest Labs and drone maker Titan Aerospace.

The earnings report showed a 26 percent rise in "paid clicks," a key figure for Google's advertising and revenues—growth slightly lower than the 29 percent expected by analysts.

The price per click fell one percent in the quarter and nine percent over the past year. Analysts say this reflects a growing move to smartphones, where clicks produce lower revenues than on traditional PCs.

"It's costing Google more to acquire content and maintain its data centers," said Paul Ausick at 24/7 Wall Street.

"This state of affairs is going to weigh down the stock price."

Google's chief financial officer Patrick Pichette said the results were impacted to some degree by some major acquisitions and the spin-off of its Motorola smartphone unit, which is being sold to China's Lenovo.

But he added that the expenses in the quarter "were completely in line with our objectives."

Pichette noted that Google broke off the results from Motorola as it prepares to sell the division, but that the 3,700 employees remained in the Google headcount of nearly 50,000 employees.

Google ended the quarter with $59.4 billion in cash, up from $58.7 billion at the close of the prior quarter.

Google has plans that include smart home thermostats, Internet connected eyewear, and making Android smartphones and tablets with partners.

"Our business is growing well," said Google senior vice president and chief business officer Nikesh Arora during the company's earnings call.

Arora said Google is trying to position itself for a "multiscreen" environment where people use various devices to access the Internet.

"People are always online and they want a seamless experience as they move from screen to screen," he said.

Earlier this year, Google announced a deal for smart thermostat start-up Nest in an accord valued at $3.2 billion. It also bought drone maker Titan for an undisclosed price, and gaming startup Green Throttle.

It agreed to sell Motorola to Lenovo for $2.91 billion, after a lackluster two-year effort to turn around the smartphone maker it bought for $12.5 billion.

Explore further:Yahoo sees signs of growth in 'core' (Update)

© 2014 AFP

More from Physics Forums - General Engineering

Related Stories

Yahoo sees signs of growth in 'core' (Update)

Apr 15, 2014

Yahoo reported a stronger-than-expected first-quarter profit Tuesday, results hailed by chief executive Marissa Mayer as showing growth in the Web giant's "core" business.

Google profit rises 16%, short of forecasts

Jul 18, 2013

Google said Thursday its second-quarter profit rose 16 percent from a year ago, but its results fell far short of market expectations.

Google, Facebook drive gains in mobile advertising (Update)

Mar 19, 2014

The market for mobile device advertising doubled in 2013 to $17.9 billion and is on pace for strong gains this year, led by Facebook and Google, a market tracker said Wednesday.

EMarketer sees 2014 mobile ad spending at $31.5B

Mar 19, 2014

Worldwide spending on mobile advertising is expected to reach $31.5 billion this year, a 75 percent increase from 2013 thanks largely to Facebook and Google, according to a new report by research firm eMarketer.

Google shares soar past $1,000 on strong earnings

Oct 18, 2013

Shares of Internet search and advertising titan Google soared more than 13 percent to pass the $1,000 mark for the first time Friday after a strong earnings report.

IBM posts higher 4Q net income (Update)

Jan 21, 2014

IBM's fourth-quarter net income grew 6 percent, surpassing Wall Street's expectations even though revenue fell. Its shares fell in extended trading after the results came out—and CEO Ginni Rometty said she's recommending ...

Recommended for you

IBM posts lower 1Q earnings amid hardware slump

2 hours ago

IBM's first-quarter earnings fell and revenue came in below Wall Street's expectations amid an ongoing decline in its hardware business, one that was exasperated by weaker demand in China and emerging markets.

Alibaba steals Yahoo's thunder ahead of IPO

8 hours ago

If Yahoo appears back in favor, it can thank Alibaba, the Chinese Web giant in which it holds a big stake and which is set for a public stock offering.

New US-Spanish firm says targets rich mobile ad market

9 hours ago

Spanish telecoms firm Telefonica and US investment giant Blackstone launched a mobile telephone advertising venture on Wednesday, challenging internet giants such as Google and Facebook in a multi-billion-dollar ...

Technip, Heerema win third giant Angolan oil contract

12 hours ago

The ultra-deep Angolan offshore oil project called Kaombo generated the third huge contract in three days on Wednesday when French group Total picked two firms to carry out underwater engineering worth $3.5 billion.

MtGox gives up rebuilding under bankruptcy protection: report

12 hours ago

Failed Bitcoin exchange Mt Gox has given up its plan to rebuild under bankruptcy protection and has asked a Tokyo court that it be liquidated, Dow Jones Newswires reported Wednesday.

Bitcoin exchange MtGox in administration, bankruptcy eyed (Update)

13 hours ago

A Japanese court Wednesday placed failed Bitcoin exchange MtGox in administration, with an order for bankruptcy expected to be issued soon, its administrator and chief executive said.

User comments : 0

More news stories

Simplicity is key to co-operative robots

A way of making hundreds—or even thousands—of tiny robots cluster to carry out tasks without using any memory or processing power has been developed by engineers at the University of Sheffield, UK.

Microsoft CEO is driving data-culture mindset

(Phys.org) —Microsoft's future strategy: is all about leveraging data, from different sources, coming together using one cohesive Microsoft architecture. Microsoft CEO Satya Nadella on Tuesday, both in ...

Computer software accurately predicts student test performance

Emotient, the leading provider of facial expression recognition data and analysis, and the University of California, San Diego announced publication of a joint study by two Emotient co-founders affiliated ...

IBM posts lower 1Q earnings amid hardware slump

IBM's first-quarter earnings fell and revenue came in below Wall Street's expectations amid an ongoing decline in its hardware business, one that was exasperated by weaker demand in China and emerging markets.

Canada police nab young man in Heartbleed data theft

Federal police said Wednesday they have arrested and charged a 19-year-old man in the theft of 900 Canadian taxpayers' data, which was made vulnerable by the "Heartbleed" bug.

Creative activities outside work can improve job performance

Employees who pursue creative activities outside of work may find that these activities boost their performance on the job, according to a new study by San Francisco State University organizational psychologist Kevin Eschleman ...

Scientists capture ultrafast snapshots of light-driven superconductivity

A new study pins down a major factor behind the appearance of superconductivity—the ability to conduct electricity with 100 percent efficiency—in a promising copper-oxide material.

Micro-macro entangled 'cat states' could one day test quantum gravity

(Phys.org) —In Schrödinger's famous thought experiment, a cat's quantum state becomes entangled with the quantum state of a decaying nucleus, resulting in the odd situation that the cat is both alive and ...

Chemical vapor deposition used to grow atomic layer materials on top of each other

Researchers at Penn State's Center for Two-Dimensional and Layered Materials and the University of Texas at Dallas have shown the ability to grow high quality, single-layer materials one on top of the other ...

Down's chromosome cause genome-wide disruption

The extra copy of Chromosome 21 that causes Down's syndrome throws a spanner into the workings of all the other chromosomes as well, said a study published Wednesday that surprised its authors.

Javascript is currently disabled in your web browser. For full site functionality, it is necessary to enable Javascript. In order to enable it, please see these instructions.

© Phys.org™ 2003-2013, Science X network

http://phys.org/news/2014-04-google-profits-short.html