Google profit misses estimates; shares drop in after-hours trade

“Google Inc., the world’s largest Internet-search company, reported profit that missed analysts’ estimates after spending more on salaries and stepping up competition with Facebook Inc. and Apple Inc. (,” Brian Womack reports for Bloomberg.

“First-quarter net income climbed to $2.3 billion, or $7.04 a share, from $1.96 billion, or $6.06, a year earlier, the company said on its website today. Profit excluding some items was $8.08 a share, below the average $8.12 analyst estimate compiled by Bloomberg,” Womack reports. “The shares declined in late trading.”

Womack reports, “Google, based in Mountain View, California, dropped as low as $547.23 in late trading. The shares, down 2.6 percent this year, had risen $2.23 to $578.51 at 4 p.m. New York time on the Nasdaq Stock Market. Excluding revenue passed on to partner sites, sales were $6.54 billion. That topped the $6.32 billion average of estimates.”

Read more in the full article here.

29 Comments

  1. Excluding revenue passed on to partner sites, sales were $6.54 billion. That topped the $6.32 billion average of estimates.

    So, in other words, if I don’t actually count my costs, I make more money? Nice accounting trick.

  2. Google is in the same direction as microsoft, they betrayed Job’s trust stealing IP from the company, they are more focus on competing against other companies than improving they core products.

    So long google.

    1. Seriously that last change Google made to basic search sucks donkey d!ck. What’s the point of me setting my preferences to 100 results if the damned results will default to a shi y time wasting 10?

  3. Says the results were down because they’re spending money to “ward off competition from Facebook Inc. and Apple.” When Eric the Mole used his seat on the Apple board to copy every product idea, how is that “warding off?” How is it they ward off somebody who was there first? I’m sure it has cost them many billions to develop Android and Chrome and just as certain they aren’t making back much anything on them. Something Schmidt didn’t makes notes of, Apple does not pursue product ideas that do not have clear profit potential.

  4. I could care less what analysts were predicting this quarter.
    The company grew some 20% in a year, nothing to sneeze at.

    Its good to see Larry Page at the helm.
    This is a guy who is focused on the long term, not the short term.

  5. A good use for the new server farms Apple is constructing: an Apple search engine that replaces Google as default on all Mac and iOS device.
    Right back at you, Eric T. Mole!!

    1. Apple acquired a map company or two over the last few years. It would be nice to see a superior Apple search/map drop like a bomb one day, eliminating Goog from from all Apple product defaults.

  6. Google is showing that its business model is limited. It depends almost exclusively on ad revenue for its income and profits, and spending more money on software and other services that don’t generate more money just eats away profits.

    For example, Google spends money developing Android, which it gives away to handset manufacturers to install on their devices. Why? So that Google will be the search engine of choice on those devices, and therefore gain more advertising revenue.

    Only it doesn’t work that way. Google was and still is the default search engine on the iPhone and iPad. So people searching are clicking on Google ads, etc. Google makes money without spending money developing Android for iOS users.

    If you couldn’t buy an Android phone, what phone would you buy? That’s right, an iPhone. With Google as the default search engine. And iPhone users have been proven in studies to surf more and buy more than Android users.

    So in the end, Google is just shooting itself in the foot. It’s like Google has diarrhea of the wallet.

  7. Maybe someday Google will come to terms with the idea that giving software away, even if the idea belongs to somebody else is not a very good business. Specially if you have to pay enough developers to keep up with a company that is making piles of cash selling what you are giving away. That is not counting the humongous legal department you have to finance just to fend off lawsuits from the real intellectual property owners. It will not be easy, but somebody has to reevaluate this crazy idea called Android because market share does not pay the bills.

    And no @Dude McFarland. Growing at 20% YOY is appropriate for Microsoft (they wish), GE or Ford. Google is supposed to be a high growth company and is valued as such.

    1. Google makes an operating system based on Linux.
      If you truly believe that Linux on an *intellectual property* level *belongs* to anyone then I guess you must love Microsoft because they claim to own somewhere around 230 patents that Linux violates. In case you don’t understand patents they are ‘ideas’

      The only reason google is getting sued over Android is because of fear, and a desire for control. I take it as a sign the OS really is that good or no one would care enough to file suit.

      Google has already stated that Android is positive on the books and with them reported to be activating 350k handsets a day somehow I don’t think its considered a bad idea in many places. More like an envious position to be in. I’m sure MS would love to buy that kind of penetration for their mobile OS.

      Google is not a short term investment, they may have experienced rapid growth due to some great ideas but if you read any of their investment material it becomes apparent that they consider themselves a long term investment proposition. The founders even went as far as to point this out when to the very first investors the company attracted.

      They hired 2,000 people recently and gave every employee a 10% raise across the board.

      I’m thinking they have big plans and Android is but a delivery method and a hedging of bets in the worst case to keep themselves relevant in the information delivery business.

      1. Yeah, the only reason Google is getting sued over Android is because of fear, and a desire for control… Oh, and also because of the patents it violates for real and the code stolen from Sun.

        None of the things Google is being sued over have anything to do with the Linux-based bits and pieces in Android. Nice strawman, Dude.

        They may have stated it’s positive on the books, but what they failed to state is that Android is just barely positive on the books. The amount of money it’s generating for Google is miserable, it’s profit margin is next to zero. Vendors are perfectly free to customize Android to such an extent that all Google services are removed from it, bringing its profit margin down to a literal zero. The whole thing is house of cards, and it’s already tumbling down.

        They’re activating* 350K handsets per day and they still missed estimates. Think about that. You want to know what a hit Android is for Google, well, there you go.

        Big plans? Uh, yeah, they want to be a world-ruling monopoly a la Microsoft. That’s no secret. They’ve even adopted the same philosophy of just throwing money at tepid successes and outright failures indefinitely in hopes of victory through persistence. Problem is, this isn’t the 90’s anymore. Microsoft’s tactics are incresingly FAIL in the 21st century. But Google is happily copying them all the same, unaware. Recipe for disaster? You bet. These missed estimates are the beginning.

        (*whatever that actually means)

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