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Forums - Gaming - Google Q4 2012 Earnings Release - Revenue: $12.9bn, Profit: $2.9bn

man-bear-pig on 22 January 2013

Google is releasing their quarterly earnings call at 1.30pm PDT/8.30pm GMT today. I'll update this OP with the numbers once they're released.

Here is the YouTube link if you want to watch it live: http://www.youtube.com/user/googleir

UPDATE:

Google Profit Rises on Year-End Advertising Gain

Google Inc. (GOOG), owner of the world’s largest search engine, reported profit that topped analysts’ projections as advertisers boosted spending to reach consumers during an extended holiday shopping season.

Fourth-quarter profit, excluding certain items, rose to $10.65 a share, Google said in a statement. Analysts had projected per-share earnings of $10.50, according to data compiled by Bloomberg.

Google gained after retailers poured money into online advertising and extended the gift-buying season. Total spending in the U.S. e-commerce industry jumped 14 percent during the last two months of 2012 as retailers began promoting Web deals earlier, according to ComScore Inc. That’s helping compensate as the company relies more on mobile advertising, which tends to be less lucrative than ads on traditional computers.

“People were probably expecting something more on the downside and results were pretty good,” said Benjamin Schachter, an analyst at Macquarie Securities USA Inc., who has a buy rating on the stock. “The transition to mobile is still a work in progress, but they are showing they can manage that process quite well.”

Shares of Mountain View, California-based Google rose in late trading, after earlier slipping less than 1 percent to $702.87 at the close in New York.

Ad Costs

Rates for mobile ads can be about 55 percent less than for promotions ed on desktop machines, according to Covario Inc., an online marketing agency. Still, the decline in the average amount advertisers paid each time a user clicks on a promotion decreased 6 percent, following a 15 percent decline in the previous period. The total number of clicks advanced 24 percent, after a 33 percent increase in the third quarter.

Revenue, excluding sales passed on to partner sites, was $12.2 billion, compared with $12.4 billion projected by analysts.

Google acquired the unit as part of its $12.4 billion purchase of smartphone-maker Motorola Mobility Holdings last year. In August, Google said it would cut 4,000 Motorola jobs and close about a third of its 90 facilities. Arris Group Inc. (ARRS) agreed to buy the Motorola Home unit for $2.35 billion in December.

With the cutbacks, Motorola now can focus on its handset business, which uses Google’s Android operating system to run the smartphones. Android, which is provided for free to manufacturers, has become a key part of the company’s push into mobile, giving Google access to user data around the world. Android snared 72 percent of the global smartphone market in the third quarter, according to Gartner Inc.

Facebook Competition

The company also has built a large leadership position in search, its core business. Google grabbed 67 percent of the market in the U.S. in December, according to ComScore Inc. (SCOR) That compares to 16 percent for Microsoft Corp. (MSFT) and 12 percent for Yahoo! Inc.

Despite its lead, Google could come under pressure from Facebook Inc., owner of the world’s largest social-networking service. Last week, Facebook announced a new search tool that lets users discover people, photos, places and interests on the service.

When fully rolled out, the feature could give Web users an incentive to use Google less. Facebook also has a partnership with Microsoft’s Bing search engine, which will deliver additional results from the Web when Graph Search doesn’t deliver clear answers to queries.

Source: Bloomberg



My prediction threads:

Wii U will sell under 40m units (made on 14th September 2012)

PS Vita will sell under 20m units (made on 30th September 2012)

Wii U will sell under 7m in 2013 - I was right

Halo 4 first 9 weeks sales prediction

PS4 to be down YOY in 2015

Around the Network
man-bear-pig on 22 January 2013

Google's fourth quarter earnings will be closely examined due to discontinued businesses, Motorola restructuring, cost per click figures and signs of the economy's health. Perhaps the focus should go to the capital expense line.

The search giant is expected to report fourth quarter earnings of $10.52 a share on revenue of $12.36 billion. However, Google indicated last week that Wall Street figures may not account for Motorola Home as a discontinued business. That unit was sold to Arris in the quarter. Translation: Wall Street estimates are too high.

Simply put, Google's typically strong fourth quarter will be muddled by Motorola's expenses and so-so revenue. Also: Google's Motorola purchase: Was it worth it?

A research note from Pivotal Research highlights a few other issues. According to Pivotal analyst Brian Wieser, Google's capital expenses may indicate an infrastructure arms race between it and Facebook, not to mention Amazon and others.

Wieser noted:

  1. Google is reportedly developing real estate in London for about $2 billion.
  2. The company is doubling its investment in a South Carolina data center to $1.2 billion.

Wieser added:

In part these capital deployments reflect what the company must view as optimal uses of cash (especially when it cannot be tax-efficiently repatriated). But this news also highlights the substantial scale of expense associated with managing a business of Google’s scale. At the same time, it highlights the scale to which any competitor must climb in order to outperform Google in key areas including search and online video, two areas where Google’s control of its own facilities and depth of investment will allow the company to maintain a substantial advantage over any other company’s efforts to develop better products and better customer experience.

Meanwhile, Facebook is expected to follow the same strategy: Invest heavily. Google may never compete with Facebook on social networking and Facebook may never battle in search. But rest assured the two parties will spend like they will. Wieser estimates Google will spend $3.2 billion on capital expenditures in 2012, $4 billion in 2013 up to $5.6 billion by 2017 on property and equipment.

Here's a look at Google's third quarter capital expenses. 



My prediction threads:

Wii U will sell under 40m units (made on 14th September 2012)

PS Vita will sell under 20m units (made on 30th September 2012)

Wii U will sell under 7m in 2013 - I was right

Halo 4 first 9 weeks sales prediction

PS4 to be down YOY in 2015

famousringo on 22 January 2013

Wouldn't it be nice if they decided to divulge any information about their mobile business aside from "activations?"



"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event."  — Mona Hamilton, Capcom Senior VP of Marketing
*Image indefinitely borrowed from BrainBoxLtd without his consent.

Cub on 22 January 2013

Google announces Q4 2012 earnings: impressive revenues of $14.42 billion, excluding Motorola Home
By Terrence O'Brien posted Jan 22nd, 2013 at 4:04 PM 15


Earnings season is swinging into high gear and today's big player is Google. The internet giant just announced its earnings for the fourth quarter of 2012, and unsurprisingly it's still raking in the dough. For the three month period ending December 31st, 2012 the company pulled in $14.42 billion in revenue -- a staggering 36 percent increase year-over-year. That doesn't even include revenue generated by Motorola's recently spun off Home division, which would have pushed the total to $15.24 billion. 2012 also marked the first year that the company broke the $50 billion barrier for total revenues. Of course, bringing in all that money means nothing if you can't actually turn a profit. Good news for investors is that Google saw a net income of $2.89 billion this quarter, up from $2.71 billion the same time last year. Not surprisingly, a large chunk of that cash is coming from Google's own properties and advertising -- with Google-owned sites accounting for 67 percent of revenues.

Motorola Mobility, on the other hand, isn't fairing so well. While pulling in $1.51 billion in revenue, the phone manufacturer managed to lose $353 million as its new parent company continues to try to turn around the business. There is a sizable war chest at its disposal however, as Google claims to have $48.1 billion in cash or its equivalent on hand.



MoHasanie on 22 January 2013

I don't get the point of buying Motorolla. Its phones aren't even as impressive as HTC's, Samsung's, and Sony's phones.



    

NNID: FrequentFlyer54

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dsgrue3 on 22 January 2013
kowenicki said:

these are out now aren't they... ?

http://investor.google.com/earnings/2012/Q4_google_earnings.html

Revenue up quite a bit, but profits flat.

Which is great considering the $1.2 billion in additional expenses...



Ail on 22 January 2013

Stop up 3.9% after hours so far.
I might lighten my position tomorrow, I have still have the stock I bought in October 2011 at 499$...



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

Kynes on 22 January 2013
MoHasanie said:
I don't get the point of buying Motorolla. Its phones aren't even as impressive as HTC's, Samsung's, and Sony's phones.


Patents.



famousringo on 22 January 2013
kowenicki said:
Motorola not doing great.


Hasn't been for years, and Google can't really do anything about it without jeopardizing relations with other OEMs.

@Kynes

Motorola's patents haven't proven to be valuable in protecting Android from Microsoft or Apple. However, the Motorola acquisition may have been very successful in protecting Android from Motorola.

http://www.fosspatents.com/2011/08/motorola-doesnt-have-license-to-kill.html



"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event."  — Mona Hamilton, Capcom Senior VP of Marketing
*Image indefinitely borrowed from BrainBoxLtd without his consent.

superchunk on 22 January 2013
famousringo said:
Wouldn't it be nice if they decided to divulge any information about their mobile business aside from "activations?"


That's all that matters to Google. Why do you think they are investing in self driving cars? All they care about is how many people are looking at their ads. Everything else is just a tool to make that happen.