The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Google missed estimates on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share dropped significantly.
Margins contracted across the board.
Google reported revenue of $14.10 billion. The 20 analysts polled by S&P Capital IQ wanted to see revenue of $14.69 billion on the same basis. GAAP reported sales were 45% higher than the prior-year quarter's $9.72 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $9.03. The 35 earnings estimates compiled by S&P Capital IQ predicted $10.69 per share. GAAP EPS of $6.53 for Q3 were 22% lower than the prior-year quarter's $8.33 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 53.5%, 1,170 basis points worse than the prior-year quarter. Operating margin was 19.4%, 1,210 basis points worse than the prior-year quarter. Net margin was 15.4%, 1,270 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $16.00 billion. On the bottom line, the average EPS estimate is $11.78.
Next year's average estimate for revenue is $53.04 billion. The average EPS estimate is $42.63.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 15,361 members out of 17,848 rating the stock outperform, and 2,487 members rating it underperform. Among 3,716 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 3,349 give Google a green thumbs-up, and 367 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Google is outperform, with an average price target of $780.54.
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