16-Apr-14 13:35 ET In Play Google Earnings Preview (547.73 +11.29) : Google (GOOG) is set to report Q1 results today after the close with a conference call to follow at 4:30pm. GOOG reported Q1 results at 4:03pm. Current Capital IQ consensus stands at EPS of $6.42 on revenues of $15.5 bln.
Shares of GOOG have been under pressure along with the broader market. The move lower came right after a stock split in which the co split its shares between Class C dividend shares that trade under 'GOOG' and Class A shares that trade under the ticker 'GOOGL'. For simplicity sake we will use the GOOG shares when commenting on share price and reaction.
We would note that the stock split and the Motorola divestiture are complicating EPS estimates. We would be cautious using this headline number when judging results. Revenues as well as the Cost per Click (CPC) and Paid Clicks will provide a better read for participants. The search results for YHOO have helped raise expectations for GOOG ahead of the report. However the co has been shaky on revenue growth as it has fluctuated from 17% to 31% to 18% over the past three quarters. EPS has also been volatile but, again, we would be cautious this time around.
GOOG reported Q4 (Dec) earnings of $12.01 per share, $0.28 worse than the Capital IQ Consensus Estimate of $12.29. Revenues rose 17.9% year/year to $16.86 bln vs the $16.76 bln consensus.
Google Sites Revenues- Google-owned sites generated segment revenues of $10.55 billion, or 67% of total revs, were up 22% y/y.
Google Network Revenues- Google's partner sites generated segment revenues of $3.52 billion, or 23% of total revs, up 3% y/y.
Google Segment International Revenue- Google segment revenues from outside of the United States totaled $8.77 billion, representing 56% of total Google segment revenues.
CPC and Paid Clicks
Paid Clicks- Aggregate paid clicks increased approximately 31% y/y and increased approximately 13% q/q. Average cost-per-click decreased approximately 11% y/y and decreased approximately 2% q/q.
Traffic acquisition costs increased to $3.31 billion in the fourth quarter of 2013, compared to $3.08 billion in the fourth quarter of 2012. TAC as a percentage of advertising revenues was 24% in the fourth quarter of 2013, compared to 25% in the fourth quarter of 2012.
On January 29, GOOG announced that it was selling its Motorola Mobile segment to Lenovo for $2.91 bln. GOOG paid $12.2 bln for Motorola back in 2012 so this seems like a disappointment on the surface but would note the co was able to keep patents which were the primary reason behind the acquisition in the first place. In Q4, Motorola Mobile segment revenues were $1.24 billion, or 7% of consolidated revenues, compared to $1.51 billion, or 11% of consolidated revenues in the fourth quarter of 2012.
Net cash provided by operating activities in the fourth quarter of 2013 totaled $5.24 billion, compared to $4.67 billion in the fourth quarter of 2012. Free cash flow was $2.98 billion. As of December 31, 2013, cash, cash equivalents, and marketable securities were $58.72 billion.
Other items of interest:
Sales of GOOG glass which kicked off yesterday. We would assume it is too early for the co to provide meaningful guidance/color.GOOG fiber launched in Kansas City so investors will be curious how the roll out is going (CMCSA, TWX). There is also chatter that co will launch that in New York City.
Google Aza development will also be closely watched as this might be the nearest monetizeable item in the pipeline. |
