Google’s First Quarter Profit Beats Estimates
Google Inc. (NASDAQ:GOOG), the US Web search giant which also owns the world’s most popular mobile operating system Android, on Friday reported first quarter profit that exceeded analysts’ forecasts. Revenue in the period, however, came short of what analysts had projected on average despite strong contributions from the company’s core businesses.
**First quarter results**
Profit, excluding some items, in the first three months of 2013 was $11.58 a share, Google said in a statement. This was more than the average analysts’ estimate for $10.68 a share. Net income in the period rose 16 percent to $3.35 billion, or $9.94 a share.
Google’s search and video businesses performed strongly in the quarter, generating $8.64 billion in revenue, 18 percent more than a year earlier.
>>“The core business is still doing well,” Macquarie Securities USA Inc.’s analyst Benjamin Schachter commented, as quoted by Bloomberg.>>
First-quarter revenue, excluding sales passed on to partner sites, increased to $11 billion, the California-based tech giant said. Analysts on average had forecast sales of $11.2 billion, according to data compiled by Bloomberg. Google’s failure to meet analysts sales forecast is to be attributed to a four percent decline in the average pay-per-click fee in the first quarter. The drop was smaller than the six percent fall recorded in the previous quarter but exceeded analysts’ forecasts for a two percent decrease. The total number of clicks increased 20 percent in the first quarter, matching analysts’ expectations.
In the first three months of the year Google benefited from a federal credit that helped reduce its tax rate and boost earnings, Chief Financial Officer Patrick Pichette said on a conference call with analysts. The company had an effective tax rate of eight percent in the first quarter, compared with 18 percent in the same period a year earlier.
In order to bolster growth Google sharpened its focus on mobile advertising, which is a market set to grow with users increasingly abandoning PCs in favour of smartphones and tablets. As iNVEZZ recently reported, in February the company revamped its online advertising service AdWords to ensure that marketers are able to easily reach users on different devices, including mobile ones (https://invezz.com/news/tech/1396-google-introduces-major-changes-to-adwords).
!m(/uploads/story/1938/thumbs/pic1_inline.png)Google, which acquired Motorola Mobility (a producer of smartphones that run on Google’s Android software) for $12.4 billion as part of its push into mobile, is set to tap the fledgling market for wearable devices – a sector reportedly targeted by other high-tech powerhouses such as Apple Inc.
(NASDAQ:AAPL) and Samsung Electronics (KRX:005930). But unlike its rivals, which are said to be developing smart wristwatch devices, Goggle’s wearable offering – already seen in action – is an eyewear computing device called Google Glass which is allowing users to communicate via the Internet, record videos, snap pictures and ask for directions while on the move.
**Google’s share price was $765.91 as of 8.49 GMT, 19.04.2013**