Google (GOOG) is out With a Miss on Second Quarter Earnings

So the number is out and Google (NASDAQ: GOOG) has missed on the bottom line and beat on the top line, reporting earnings of $6.45 a share verse consensus estimates of $6.51 on revenues of $5.09 billion against estimates of $5.0 billion.  2nd quarter paid clicks checked in 15% higher than the previous year.   Estimates were cut by many analysts leading up to the earnings and the stock’s share price had taken a beating since their first quarter earnings report in mid-April.

CEO Eric Schmidt offered the following observations:

“Google had a strong second quarter.  Solid growth in our core business and very strong growth in our emerging businesses drove 24% revenue growth year over year. We saw strength in every major product area, as more and more traditional brand advertisers embraced search advertising and as large advertisers increasingly ran integrated campaigns across search, display, and mobile. We feel confident about our future, and plan to continue to invest aggressively in our core areas of strategic focus.”

I was looking for signs of an uptick in revenue from YouTube and Android.  Looks like it will take some more time to really see those trends play out.  It was good to see a revenue beat, but the EPS miss was indicative of increased spending.  At first glance it seems as though the most notable trend in Google’s earnings was an increase in its capital expenditures and we know that during the second quarter, Google was rather active in M&A and started doing some more hiring.  As of this writing, shares are trading down $18.29 to $473.05 in afterhours trading. Check back for more analysis as we dig deeper into Google’s report.

Disclosure: Long GOOG

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