Google Earnings Beat Excluding EU Fine; Google Stock Falls – Investor's Business Daily

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Google-parent Alphabet (GOOGL) on Monday said first-quarter profit topped views, excluding a $1.7 billion European Union fine, while revenue missed estimates. The Google earnings report caused the stock to fall in extended trading.

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Google earnings were $11.90 a share, up nearly 20% from a year ago, excluding one-time investment gains during that period. Including the EU fine, Google said it earned $9.50 a share. Revenue rose 17% to $36.34 billion.

A year earlier, Google earnings were $9.93 a share on sales of $31.15 billion. Including an investment gain, year-ago earnings were $13.33. Analysts expected Google earnings of $10.56 on sales of $37.33 billion for the period ended March 31.

Shares in the internet search and digital advertising giant fell 4.6% to 1,237 in extended trading on the stock market today.

Google Earnings: Properties Revenue Misses Estimates

Google Properties revenue climbed 17% to $25.68 billion, but fell short of estimates of $26.26 billion. The division includes ad revenue from Gmail, Google Play and YouTube. Google Maps has been mostly ad-free, but the company is introducing new ad products for it.

Google’s revenue miss again raises questions on Amazon.com‘s (AMZN) growing impact in the digital advertising business. Google and Facebook (FB) dominate in digital ads.

Further, Google investments in cloud computing, consumer hardware and other areas have pressured operating margins.

But there’s more than Amazon going on, says Monica Peart, eMarketer senior forecasting director.

“As expected, Google ad revenue growth has been slowing amid downward pressure on ad prices, especially for revenue coming from international markets,” she said in an email.

Google TAC Growth Slows, A Bright Spot

Still, traffic acquisition costs — or what Google pays to partner websites — rose less than analysts projected. Google said traffic costs rose 22% to $6.86 billion, while views stood at $7.26 billion.

“Lower year-over-year growth in (traffic costs) reflects faster growth in Google Sites revenue and implies that there is no runaway inflation in this important metric,” SunTrust Robinson Humphrey analyst Youssef Squali said in a note to clients.

Google stock has shot up 25% from a year ago.

Follow Reinhardt Krause on Twitter @reinhardtk_tech.

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