Google's Q2 falls below expectations with EPS of $9.56

Google's Q2 falls below expectations with EPS of $9.56

Summary: UPDATED: Google has activated more than 900 million Android devices to date with 1.5 million more everyday.

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Following up a quarter packed with Glass news, the annual I/O developer conference, and damage control thanks to the NSA leak, Google revealed its financials for the second quarter of 2013.

The Internet giant reported a second quarter net income of $3.23 billion with earnings of $9.54 per share (statement). Non-GAAP earnings were $9.56 per share on a consolidated revenue of $14.11 billion, up 19 percent annually.

But traffic acquisition costs rounded out to $3.01 billion, or 25 percent of advertising revenues.

Thus, revenue minus TAC was $11.1 billion.

But Wall Street was looking for earnings of roughly $10.78 per share on a revenue of $14.42 billion.

Google asserted that Q2 revenue would have been $177 million higher if "foreign exchange rates remained constant from the first quarter of 2013 through the second quarter of 2013."

Still, CEO Larry Page trumped up the consolidated revenue stats in prepared remarks:

Google had a great quarter with over $14 billion in revenue – up 19% year-on-year. The shift from one screen to multiple screens and mobility creates tremendous opportunity for Google. With more devices, more information, and more activity online than ever, the potential to improve people’s lives even more is immense.

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For the third quarter, Wall Street is expecting Google to deliver a revenue of $15.03 billion with earnings of $11.11 per share.

Google did not provide third quarter guidance in its earnings report published after the bell on Thursday, but it is expected to be revealed during the conference call with analysts and investors at 1:30PM PT/4:30PM PT.

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Here are some of the big numbers to know from Google's Q3:

  • The employee count has shifted now that Motorola Home is gone: On a worldwide basis, Google employed 44,777 full-time employees (40,178 in Google and 4,599 in Motorola Mobile) as of June 30. That's compared to 53,891 full-time employees (38,739 in Google, 9,982 Motorola Mobile, and 5,170 Motorola Home) as of March 31.
  • Motorola posted a net operating loss $218 million, or -22 percent of Motorola Mobile revenues. That's steeper than the loss of $49 million, or minus six percent of Motorola Mobile revenues during the second quarter of 2012.
  • The international revenue contribution remained flat on a quarterly basis as revenues from outside of the United States totaled $7.2 billion, or 55 percent of total Google revenues in Q2.
  • Google has activated more than 900 million Android devices to-date with 1.5 million more everyday.
  • Chrome has 750 million users worldwide and growing.
  • Advertisers have upgraded more than 600 million campaigns amid biggest change ever to AdWords.
  • Google Play has seen 15 billion app downloads.

CORRECTION: A Google spokesperson clarified, despite what was printed in some transcripts of the call, that CEO Larry Page actually said there have been 50 billion app downloads from Google Play -- not 15 billion.

Slides via Google Investor Relations

Topics: Mobility, Android, Apps, Cloud, Google

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10 comments
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  • "The shift from one screen to multiple screens..."

    What, exactly, does that mean?
    Userama
  • "Google's Q2 falls below expectations"

    That kind of statement in financial reports just drives me crazy. Why is it never "Analysts screw the pooch, miss reality by a country mile, are unable to perform basic job function"? Why is it always the company's fault when the analysts are wrong? Do analysts have access to some Platonic ideal world of information that the company is unable to reify out of sheer incompetence?
    Vesicant
    • Yes. Analists are never wrong.

      When I grow up, I want to be an analist.
      No, isn't misspelled.
      Userama
  • Wait -GAAP earnings flat Y/Y? - wow.

    Table 2, showing the real numbers:

    Income Q2 2013 $3.465B
    Income Q2 2012 $3.436B

    I can't tell if that includes the continuing money leak that is Motorola. And their bread and butter, online ads, continues to suffer.

    This company has (well, had) a P/E of 28.

    Why?
    pdq
  • MSFT report also "a mighty whiff"

    Missed on earnings and revenue, even before writing down Surface RT.

    Yikes.

    Good thing that "PostPC" era thing is so obviously overblown.
    pdq
  • How are all of those Android handsets helping?

    The easy answer is not at all. All that growth in Android and desktop display ads still butter the bread.
    Bruizer
    • Actually the bread and butter is not in Android ads

      Google actually makes more than 65% of the mobile revenue from iOS, not Android.
      wackoae
  • Android Is The Least Stable Linux I Have Ever Used

    Android is the only Linux system I have come across which requires a reboot at least once a month, otherwise it is liable to misbehave in odd ways. Normally on a Linux system, you can kill and relaunch a misbehaving app, and it will run fine again. But on Android, things seem to hang around in memory and cause strange things to happen, even in supposedly freshly-started processes.

    I just had to reboot my Nexus 7 after 42 days uptime, to cure strange things happening in Chrome.
    ldo17
  • Google's Q2 falls below expectations with EPS of $9.56

    Where are the 20 articles about Google not meeting expectations? Its a ZDNet bias. No one expected Google to hit their target when its a one trick pony.
    Loverock-Davidson
  • So, where are the bloggers with their "postGoogle" articles?

    Where are the "postSearch" article?

    Certainly, if the "post-PC" mantra is applicable when PC sales slow down, then it's just as applicable to anything else that shows a slowdown in sales.
    adornoe@...