Google published its financials for Q4 2013 yesterday evening and the results pleased investors, as evidenced by a rise of around four per cent in the share price in afterhours trading. The shares had already risen over 2.5 per cent before the closing bell yesterday, due to investor optimism.
Google's revenue was $16.86 billion for the quarter ended 31st December 2013, an increase of 17 per cent compared to the fourth quarter of 2012. Profits came in at $12.01 per share, a good increase from the $10.65 a share for the same period last year. However investors had expected profits per share of $12.21 so this was not as good a result as it sounds. Summing that up, Ron Josey, an analyst at JMP Securities, told USA Today that "They beat on the top line, while the bottom line was a bit light". Josey went on to point out that Google's core ad business revenue did grow an impressive 22 per cent.
Analysts think that Motorola dragged that earnings per share down (losing $384 million in Q4) so it is good news for Google in the current state of things, that it has got a deal with Lenovo to make Moto out of its hands. However it will take a number of months for Google to divest its interests in Motorola.
Looking again at Google's core ads business there were swings and roundabouts evident; cost per click (CPC) was down by about 11 per cent during the quarter but the amount of paid clicks jumped over 30 per cent - this more than offset the lower value of a single click. Discussing the increase in click-throughs of its ads Google Chief Business Officer, Nikesh Arora, said "In the holiday season one thing has become very clear, the Web has truly become the new holiday store window". Mobile traffic is thought to be the cause of the cost per click reduction as advertising rates are lower on mobile platforms. Traffic acquisition costs (TAC), another important factor in Google's ad business, were flat this quarter.
In the post results conference call Google execs talked a bit about Google devices; "There's great momentum in Q4 on the Nexus 5 and Chromecast. We're very pleased with the performance of both of those, and Chromebooks," said Patrick Pichette, Google's CFO.
You can read many more details about Google's operations and finances in its official results statement.
