Google’s results: Here’s what you need to know
Google has reported its results for the fourth quarter and its worse than expected. Earnings per share were 20 cents below analysts' estimates at $6.88 while revenue came in $100m short at $14.5bn.
On the upside profits were $4.76bn – 30 per cent up from the same period the year before.
Analysts' forecast compiled by Thompson Reuters expected revenue to be up 9.5 per cent year-on-year and pre-tax profit up 26.5 per cent. This week has seen a flurry of results from major US tech firms.
Facebook and Apple both posted impressive numbers beating many analysts' forecast. Google alsso had a disappointing third-quarter thanks to large operating expenses and a slowdown in its advertising business. Google hired 3,000 employees in the third-quarter and is buying up real estate thick and fast.
Market watchers will be looking closely at Google's advertising revenue. This has become a key concern for the company and has weighed on its share price, which has dropped nine per cent over the past year.
For the fourth quarter paid clicks rose 11 per cent. Average cost per click fell three per cent and cost-per-click for Google sites slumped approximately eight per cent.
In the third quarter, ad revenue grew by 17 per cent, down from the 25 per cent year-on-year increase in the quarter before. As people shift toward smartphones Google could experience something of a squeeze because advertisers pay less for clicks on mobile devices. However, Google remains well positioned to benefit long-term from the transition.