Google Inc. Earnings Cheat Sheet: Beats Forecasts

S&P 500 (NYSE:SPY) component Google Inc. (NASDAQ:GOOG) reported net income above Wall Street’s expectations for the first quarter. Google provides search and advertising services and makes this information freely available to anyone with an Internet connection.

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Google Earnings Cheat Sheet for the First Quarter

Results: Net income for Google Inc. rose to $2.89 billion ($8.75 per share) vs. $1.8 billion ($5.51 per share) in the same quarter a year earlier. This marks a rise of 60.7% from the year-earlier quarter.

Revenue: Rose 24.1% to $10.64 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Google Inc. reported adjusted net income of $10.08 per share. By that measure, the company beat the mean estimate of $8.23 per share. It beat the average revenue estimate of $8.13 billion.

Quoting Management: “Google had another great quarter with revenues up 24% year on year,” said Larry Page, CEO of Google. “We also saw tremendous momentum from the big bets we’ve made in products like Android, Chrome and YouTube. We are still at the very early stages of what technology can do to improve people’s lives and we have enormous opportunities ahead. It is a very exciting time to be at Google.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 28.4%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 33.4% from the year earlier quarter.

The company has now seen its net income increase for three consecutive quarters. In the fourth quarter of the last fiscal year, net income rose 6.3% and in the third quarter of the last fiscal year, the figure rose 25.9%.

Gross margin shrank 1.4 percentage points to 64.4%. The contraction appeared to be driven by increased costs, which rose 29.1% from the year earlier quarter while revenue rose 24.1%.

The company topped expectations last quarter after falling short of forecasts in the fourth quarter of the last fiscal year with net income of $8.22 versus a mean estimate of net income of $9.06 per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from $8.99 a share to $8.61 over the last ninety days. For the fiscal year, the average estimate has moved down from $38.18 a share to $36.65 over the last ninety days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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