Google misses market expectations, $6.27 EPS on $15.4 billion

Douglas Soltys

April 16, 2014 5:32 pm

Google released their Q1 2014 financial results today, and despite a healthy quarter, Google failed to meet high market expectations. Google posted a Q1 revenue of $15.4 billion verses analyst estimates of $15.54 billion, and a $6.27 adjusted EPS versus analyst estimates of $6.44. Google is currently down 4% in after-hours trading at the time of this posting.

Of course, Q1 also saw Google’s sale of Motorola and acquisition of Nest. Google said that its ‘Net Loss from Discontinued Operations’, which includes results related to the Motorola sale, was $198 million for the quarter (up $17 million from q1 2013). However, Google also stated that Motorola itself had a strong quarter, posting a revenue of $1.45 billion.

Fielding questions in an conference call following the financial results, Google CFO (and fellow Canadian) Patrick Pichette stated that Play Store revenue from apps and other media had been a key driver to Google’s growth. Google paid out 300% more revenue to developers in Q1 2014 compared to Q1 2013. Pichette also indicated that Chromecast has also been a real hit for the company, following its recent release in 11 more countries around the world.

SourceGoogle

  • ChrisPollard77

    I love the stock markets. I don’t care what the company is … profits, no matter HOW MUCH, don’t meet the guesstimate of some random analyst … stocks tank. Then rebound for no logical reason. (Other than someone on Wall Street buying low in ways us average humans aren’t allowed, then selling when the rebound happens, also in ways us average humans aren’t allowed to.) I wonder what Wall Street would look like if it mattered what the actual dollars and cents were, and not how much they hit or missed somebody’s hopes of what they think they might maybe make. Crazy.

    • alphs22

      Analyst expectations affect the valuation of a company in between quarterly financial reports. When a company doesn’t meet them (or exceeds them), the price corrects accordingly.

      Another way to look at it is that GOOG was overvalued for the 3 months prior, partially due to the expectations set at the beginning of Q1, and now is returning to the “real” market price, so to speak.

      You are correct that the markets can be illogical sometimes, but in this case the response is nothing but logical.

    • bigshynepo

      Right there with you, stocks are completely manipulated and the uneducated investors are practically fish in a barrel. The trick is being on the same page as the Market Makers but when blue chips are slipping 5% in a day, you know things are turbulent right now.

    • RMT

      It’s a great time to make money!

    • beyond

      things are turbulated?

  • NOT RahmEmanuel

    Quick note to the editor/author:

    Tho’ you are correct in saying that Google’s share-price is currently down by a few points in after-hours trading, it would be equally accurate — moreover, helpfully thorough reportage — to note that it ended Wednesday’s regular trading up by $20.10 (3.75%).

    i.e.: It fluctuated in both directions by roughly the same amount.
    .

  • WireNow

    They are a solid investment. There is always going to be some fluctuation. There are short-term traders, long-term traders and even autonomous trading (trades set automatically based upon certain flux). What I cannot stand is that every time there is some news of a solid company falling short of their projected earnings and the stock moves a bit because of it, it has to make headlines. For a company like Google (putting aside all the trivial claims concerning their S.O.P’s) this doesn’t matter. It’s not as if they’re going to drop the ball and it’s not as if they did.

    The sale of Motorola holdings was a smart move. They had in-house manufacturers for their Nexus series and don’t need these hardware divisions. Maybe I’m digressing here and maybe I’m speaking out of turn (I feel as though it was a good move to drop Motorola Holdings Inc.), nevertheless this is not a sign of weakness for them. And YES I know that the article is NOT claiming that it is.. but I also know that argument by implication is such a big deal these days, so I figured it was worth stating.