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Google Revenue Ex-TAC Misses, EPS Beats, Cost-Per-Click Drops 6% Y/Y

Tyler Durden's picture




 

The GOOG algos have gone nuts after hours, but here are the numbers:

  • GOOGLE 4Q REV. EX TAC $11.34B, Exp. $12.36
  • GOOGLE 4Q AVERAGE COST-PER-CLICK FELL 6% VS YEAR AGO
  • GOOGLE 4Q EPS EX ITEMS $10.65, EST. $10.50

Highlights from the earnings release:

  • GAAP operating income in the fourth quarter of 2012 was $3.39 billion, or 24% of revenues. This compares to GAAP operating income of $3.51 billion, or 33% of revenues, in the fourth quarter of 2011. Non-GAAP operating income in the fourth quarter of 2012 was $4.27 billion, or 30% of revenues. This compares to non-GAAP operating income of $4.04 billion, or 38% of revenues, in the fourth quarter of 2011. Had we included Home, non-GAAP operating income in the fourth quarter of 2012 would have been $4.31 billion.
  • GAAP net income including net loss from discontinued operations in the fourth quarter of 2012 was $2.89 billion, compared to $2.71 billion in the fourth quarter of 2011. Non-GAAP net income in the fourth quarter of 2012 was $3.57 billion, compared to $3.13 billion in the fourth quarter of 2011.
  • GAAP EPS including impact from net loss from discontinued operations in the fourth quarter of 2012 was $8.62 on 335 million diluted shares outstanding, compared to $8.22 in the fourth quarter of 2011 on 329 million diluted shares outstanding. Non-GAAP EPS in the fourth quarter of 2012 was $10.65, compared to $9.50 in the fourth quarter of 2011.
  • Non-GAAP operating income and non-GAAP operating margin exclude stock-based compensation (SBC) expense, as well as restructuring and related charges recorded in our Motorola Mobile business.  Non-GAAP net income and non-GAAP EPS exclude the expenses noted above, net of the related tax benefits, as well as net loss from discontinued operations. In the fourth quarter of 2012, the expense related to SBC and the related tax benefits were $700 million and $152 million compared to $536 million and $114 million in the fourth quarter of 2011.  In the fourth quarter of 2012, restructuring and related charges recorded in our Motorola Mobile business were $178 million, and the related tax benefits were $65 million. In addition, net loss from discontinued operations, in the fourth quarter of 2012, was $21 million. In the fourth quarter of 2012, non-GAAP operating income with Home included the impact from Home of $35 million and excludes the above SBC expense and restructuring and related charges.
  • Cost-Per-Click - Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the fourth quarter of 2011 and increased approximately 2% over the third quarter of 2012.
  • TAC - Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.08 billion in the fourth quarter of 2012, compared to $2.45 billion in the fourth quarter of 2011.
  • TAC as a percentage of advertising revenues was 25% in the fourth quarter of 2012, compared to 24% in the fourth The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.44 billion in the fourth quarter of 2012. TAC also includes amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $634 million in the fourth quarter of 2012.uarter of 2011.

Google after hours ignoring the weak top-line news, and squeezing any left over shorts to new highs, up over 3% after hours:


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Tue, 01/22/2013 - 17:10 | 3176820 koder
koder's picture

Hope it burns?

Tue, 01/22/2013 - 17:17 | 3176858 kaiserhoff
kaiserhoff's picture

Google be praised.

           Boris

Tue, 01/22/2013 - 17:23 | 3176882 slaughterer
slaughterer's picture

Not exceptionally bad news, so GOOG will go up.   

Tue, 01/22/2013 - 17:32 | 3176914 CPL
CPL's picture

TZA is almost in postion btw.  Closing the gap fast to 1497.

Tue, 01/22/2013 - 17:41 | 3176929 nope-1004
nope-1004's picture

$1,000,000,000 revenue miss?  lol... burn higher baby!

 EPS can only be massaged so long in the face of falling revenues.

 

Tue, 01/22/2013 - 18:43 | 3177121 Tijuana Donkey Show
Tijuana Donkey Show's picture

One word. Adblocker...... It's killing their business model. If you want something really kinky, run a free squid proxy on a computer in your house with the ad filter. You can wash ads from iphones, ipads, anything by using it as a proxy.  As a point of honor, I do pause it on ZH, and click some ads each day to show Tyler some respect. 

http://adzapper.sourceforge.net/

Set it up, use the proxy by setting up the http proxy settings on your device. VERY effective with kids. Extra credit, give each person their own username, and you can log and review traffic.

Tue, 01/22/2013 - 21:33 | 3177547 Spastica Rex
Spastica Rex's picture

WTF is this? Slashdot?!

Tue, 01/22/2013 - 17:10 | 3176828 LawsofPhysics
LawsofPhysics's picture

Serious effort to reflate a tech bubble.  Okay fine...

Tue, 01/22/2013 - 17:26 | 3176897 GrinandBearit
GrinandBearit's picture

Serious effort the reflate EVERYTHING.

Tue, 01/22/2013 - 17:34 | 3176922 CPL
CPL's picture

Only to be stolen by net increasing energy costs in PM and rising prices in PM's that effect the cost of electronics directly.

Tue, 01/22/2013 - 22:45 | 3177702 MiltonFriedmans...
MiltonFriedmansNightmare's picture

With Apple in the tank, something has to be green to keep the major averages levitating.

Tue, 01/22/2013 - 17:19 | 3176829 Dr. Engali
Dr. Engali's picture

The big question is did analysts have enough time to lower estimates so CNBS can pronounce with great jubilation that Google beat estimates.

 

 

Edit...Fricken thing is up 30 bucks after hours....damn broken market.

Tue, 01/22/2013 - 17:12 | 3176830 thismarketisrigged
thismarketisrigged's picture

lol, nothing can stop this fraud of a market. look at aapl go crazy on the algos with the news of google, lol what a fucking joke

Tue, 01/22/2013 - 17:14 | 3176842 alien-IQ
alien-IQ's picture

This is not a market, it's a hamster wheel. Or as one article long ago once phrased it: "A neo-feudalistic gulag casino".

Tue, 01/22/2013 - 17:12 | 3176831 alien-IQ
alien-IQ's picture

Get ready for the Reggie version of the Dion Sanders endzone dance.

Tue, 01/22/2013 - 18:49 | 3177136 Tijuana Donkey Show
Tijuana Donkey Show's picture

yes, but with the algo treatment, his being right isn't helping his followers picks. Poor Reggie, it's hard to be a honest man in a dishonest world.

Tue, 01/22/2013 - 17:14 | 3176845 dirtyfiles
dirtyfiles's picture

zero credibility with this wall st.circus

Tue, 01/22/2013 - 17:16 | 3176854 market le pew
market le pew's picture

So what, it's going up

Tue, 01/22/2013 - 17:20 | 3176866 dirtyfiles
dirtyfiles's picture

why bother with earnings at all or any economic news for this idiots

Tue, 01/22/2013 - 17:28 | 3176900 Tsar Pointless
Tsar Pointless's picture

Shorts?

Too cold for shorts. Gonna be around zero tonight.

No shorts allowed.

Tue, 01/22/2013 - 17:56 | 3176990 thismarketisrigged
thismarketisrigged's picture

i really want this market to collapse so hard so all these bankers and fraudsters lose there money. i am not feeling confident though

Tue, 01/22/2013 - 18:04 | 3177009 tawse57
tawse57's picture

If it goes up it is their money, if it goes down it is our money.

US and UK banking systems were Socialised in 2009.

Tue, 01/22/2013 - 18:48 | 3177131 espirit
espirit's picture

"GOOGLE 4Q AVERAGE COST-PER-CLICK FELL 6% VS YEAR AGO"

My Gawd, the economys improving.  That means that the 6% must stayed at a Holiday Inn Express thus learned to spell without Google.

sarc on/off, I forget which.

Tue, 01/22/2013 - 20:42 | 3177436 JuliaS
JuliaS's picture

Google's latest product - a self-trading stock. No investors required.

Tue, 01/22/2013 - 23:05 | 3177761 Westcoastliberal
Westcoastliberal's picture

They must be trying like hell to hang on to every cent of their CPC, because I've sure as hell not seen any "6% decrease"; the greedy bastards game their system by implementing a "quality score" for your website.  This allows them to charge whatever the hell they want for decent exposure; i.e. you're bidding $1.34 for an average position on page 1; they come along and warn you the cost is now $3.24 to appear 1st page.  Keep you bid the same and the impressions slow to a trickle.

They've been tightening the screws on this now for the past several years, IMO.

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