Talked with ECommerce Times about Google’s Q3 numbers.
Google earnings report came as a surprise. It was earlier than expected. It was worse than expected. The company posted third-quarter earnings excluding items of $9.03 per share, down from $9.72 a share a year ago. However, revenue increased 51 percent to $11.33 billion from $7.51 billion a year ago.
The good news first. There is growth. The company is operating relatively well in a slow macroeconomic environment. But even Google is feeling the heat – at least a little.
First, the company revealed that its average cost-per-click declined 15 percent compared to the third quarter a year ago. This is a key metric to watch since it is core to Google’s business and income potential. Click prices have been under pressure for a number of quarters. It’s in Google’s best interest to stop this trend.
Second, Google has to absorb operational losses from Motorola Mobility. Investors hope that this will be only a temporary phenomenon as executives are working hard to turn this business unit around.
A 51% top line growth year over year would be for most business excellent news. For Google the expectations were higher. It missed analyst expectations by $530 million. The market has hoped that they would report earnings excluding items of $10.65 a share. They didn’t. Google slipped in Q3 of 2012.