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Google Earnings Spur Trading

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Google Earnings Spur Trading

Google's first-quarter profits topped estimates by hitting $11.58 a share, with its core business doing well and boosted by its search and video properties.

However, sales rose to $11 billion, but didn't meet the analysts' predicted $11.2 billion, Bloomberg reported. While that doesn't sound like much negative in a sea of positive, Bloomberg's headline "Google Sales Miss Estimates as Ad Fees Per Click Fall" seemed to take it in a much darker direction. The search titan's ad-clicks declined 4 percent after another 6 percent decline the quarter before. Part of the reason for Google's good earnings was based on a federal credit that reduced its tax rate to 8 percent versus 18 percent the year before.

Google-owned sites revenue rose 18 percent to $8.64 billion, according to Benjamin Schachter, an analyst at Macquarie Securities USA. “They’re managing to maintain a lot of strength in that core business across geographies," he told Bloomberg.

News of the first-quarter earnings spurred share price up 4 percent and closed at $765.91 at the close. 
 
In short, Google's earnings report was mostly positive but its ad fees per click have fallen for the last two quarters which could indicate something's not working. Its dropped tax rate also improved profits which will unlikely be helping out next time. So it's a mixed bag for Google -- there's good profits, but it's based on a favorable tax rate.
 
 

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