Google earnings for Q2 2010 less than expected

Google announced its second quarter results on Thursday and failed to meet analysts expectations.

Wall Street analysts forecast earnings per share of $6.52 but in reality the earnings were $6.45 per share. However, Google's second-quarter revenue was $6.82 billion for the quarter, up 24% compared to last years figures. The financial community was expecting $4.99 billion in revenue for the quarter and Google announced it took $5.1 billion in the quarter. Although revenue was solid, the FT reports "a burst of higher spending in the first quarter, which saw Google return to aggressive hiring, had put Wall Street on alert about the prospects for profit margins."

Reactions to the earnings announcements focus heavily on the negatives. The profit per share missed estimate is partly due to the average cost per click on Google ads which increased only 4% in the last year, less than analysts predicted. Google's shares dropped 4% in after-market trading as investors reacted to the announcement. The web giants share price has slipped 18.5% in the past three months.

“Google had a strong second quarter,” said Eric Schmidt, CEO of Google. “Solid growth in our core business and very strong growth in our emerging businesses drove 24% revenue growth year over year. We saw strength in every major product area, as more and more traditional brand advertisers embraced search advertising and as large advertisers increasingly ran integrated campaigns across search, display, and mobile. We feel confident about our future, and plan to continue to invest aggressively in our core areas of strategic focus.”

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16 Comments

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Microsoft's online division (the division that controls all Microsoft's online offerings except Azure which is part of the server division) has consistently made losses year after year. Approx $1bn loss a year in recent years.

thealexweb said,
Microsoft's online division (the division that controls all Microsoft's online offerings except Azure which is part of the server division) has consistently made losses year after year. Approx $1bn loss a year in recent years.

This is relevant because....?

thealexweb said,

Compares it against how well the competition are doing?

sure I guess that has context to the articale

thealexweb said,
Microsoft's online division (the division that controls all Microsoft's online offerings except Azure which is part of the server division) has consistently made losses year after year. Approx $1bn loss a year in recent years.

Because they are playing catch up, since google already have an established base, is that not obvious...

Minimoose said,

Because they are playing catch up, since google already have an established base, is that not obvious...

Microsoft can't use that excuse, MSN was launched in 1995 and Google did open its doors till 1998.

Seriously, it's better than it was in 09 and all of 08. They're good results. Of course you can't expect things to go up like 10% every quarter, that's just not gonna happen.

amon91 said,
Seriously, it's better than it was in 09 and all of 08. They're good results. Of course you can't expect things to go up like 10% every quarter, that's just not gonna happen.

Tell that to everyone who works at wall street