Amidst controversy such as privacy concerns and a Federal Trade Commission investigation, Google announced its second-quarter earnings, including record revenue that increased its stock price by more than 10% overnight.
Here's the Numbers
- Revenues of US$ 9.03 billion for the quarter ended June 30, 2011, an increase of 32% compared to the second quarter of 2010
- GAAP operating income in the second quarter of 2011 was US$ 2.88 billion, or 32% of revenues, compared with GAAP operating income of US$ 2.37 billion, or 35% of revenues, in the second quarter of 2010
- GAAP net income in the second quarter of 2011 was US$ 2.51 billion, compared to $1.84 billion in the second quarter of 2010
- GAAP EPS in the second quarter of 2011 was US$ 7.68 on 326 million diluted shares outstanding, compared to $5.71 in the second quarter of 2010 on 322 million diluted shares outstanding
- Google+ has more than 10 million users after just two weeks in public existence
- Paid clicks rose 18% over the previous year
- Price per click rose 12% over the previous year, and had been 8% in the previous quarter
- 500,000 new Android activations per day
What It All Means
[I]it might shock you to learn that analysts had been rushing to trim down their estimates for Google's earnings in recent months...Those results were far ahead of what even the most starry-eyed analyst projected," wrote Daily Finance.
In addition to the FTC investigation, Google is also facing perceptions that it is growing more slowly than newer, exciting IPOs and planned IPOs such as Facebook, said the Wall Street Journal. Moreover, the company has much higher expenses, including new employees and more than doubling of its capital expenditures, which a number of reports indicated are factors that worry investors.
Daily Finance pointed out, however, that Google sticks to its knitting and that everything Google does is intended to drive people to its search engine to make its results better, including giving Android away rather than trying to make money by selling it.
And Forbes praised Page, who took over as CEO six months ago from Eric Schmidt, for his presence on the call, after criticism in the past that he hadn't been around much, and recommended that he continue to do so for earnings calls in the future. "Page was pilloried after he made only a brief statement to analysts in his first quarterly conference call as CEO in April," according to the Los Angeles Times. He was also praised for responding directly to investor concerns.