"France places
stand;
directed at with
places Up,
up,
the Google."

-- "Growing Up Google," by Shawn Rider's Google-powered poetry generator

On Thursday, Google (Nasdaq: GOOG) released first-quarter 2008 earnings for the period ended March 31.

  • Read our full analysis on Google's earnings.
  • After reporting earnings following the market's close yesterday, Google shares opened almost 20% higher today.
  • Year-over-year growth on all fronts is slowing down as Big G grows into its breeches. The company made a net profit of $399 million in all of 2004, compared to $4.7 billion in the past 12 months. Clearly, Google's done a lot of growing -- but it still operates in a world of rich online margins.
  • Google is vacillating between two-star and three-star ratings these days at Motley Fool CAPS. Mosey on over and see whether you can knock that third star off again with a thumbs-down rating -- or take it to the next level with a thumbs-up.

(Figures in millions, except per-share data)

Income Statement Highlights

Q1 2008

Q1 2007

Change

Sales

$5,186

$3,664

41.5%

Net Profit

$1,307

$1,002

30.4%

EPS

$4.12

$3.18

29.6%

Diluted Shares

317.4

314.9

0.8%

Get back to basics with the income statement.

Margin Checkup

Q1 2008

Q1 2007

Change*

Gross Margin

59.3%

59.9%

(0.6)

Operating Margin

29.8%

33.3%

(3.5)

Net Margin

25.2%

27.4%

(2.2)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2008

Q1 2007

Change

Cash + Short-Term Investments

$12,135

$11,936

1.7%

Accounts Receivable

$2,561

$1,477

73.4%

Liabilities

Q1 2008

Q1 2007

Change

Accounts Payable

$358

$182

97%

Long-Term Debt

$0

$0

N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2008

Q1 2007

Change

Cash From Operations

$1,779

$1,220

45.9%

Capital Expenditures

$842

$597

41%

Free Cash Flow

$938

$623

50.6%

Owner Earnings

$802

$610

31.4%

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap (Billions)

Trailing P/E Ratio

CAPS Rating

Microsoft (Nasdaq: MSFT)

$279.2

17.0

***

Google

$171.1

41.6

***

Yahoo! (Nasdaq: YHOO)

$38.1

60.7

**

Baidu.com (Nasdaq: BIDU)

$11.4

130.2

***

IAC (Nasdaq: IACI)

$5.9

N/A

***

Using the latest reported numbers from Capital IQ, a division of Standard & Poor's. Keep your partners close and the competition in your vest pocket.

Related Foolishness:

Microsoft is a Motley Fool Inside Value recommendation, and Baidu.com is a Motley Fool Rule Breakers pick. Try any newsletter you like, free for 30 days.

Fool by Numbers provides raw earnings information in a timely, convenient package. But since numbers never provide the whole story, check Fool.com for more in-depth discussion of the meaning behind the earnings.

At the time of publication, Anders Bylund was a Google shareholder but had no other position in any company mentioned. Fool rules are here.