Please ensure Javascript is enabled for purposes of website accessibility

Google Increases Sales but Misses Estimates on Earnings

By Seth Jayson - Updated Apr 7, 2017 at 7:10PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Just the facts, Fool.

Google (Nasdaq: GOOG) reported earnings on Jan. 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Google missed on revenue and missed on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly, and earnings per share improved.

Margins dropped across the board.

Revenue details
Google booked revenue of $10.6 billion. The 25 analysts polled by S&P Capital IQ looked for a top line of $10.9 billion. Sales were 25% higher than the prior-year quarter's $8.4 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $9.50. The 33 earnings estimates compiled by S&P Capital IQ predicted $10.48 per share on the same basis. GAAP EPS of $8.22 for Q4 were 5.3% higher than the prior-year quarter's $7.81 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 65.0%, 10 basis points worse than the prior-year quarter. Operating margin was 33.1%, 220 basis points worse than the prior-year quarter. Net margin was 25.6%, 450 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $10.7 billion. On the bottom line, the average EPS estimate is $10.11.

Next year's average estimate for revenue is $46.0 billion. The average EPS estimate is $43.85.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 14,847 members out of 17,316 rating the stock outperform, and 2,471 members rating it underperform. Among 3,563 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 3,215 give Google a green thumbs-up, and 348 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 $731.19.

New technology paradigms and mobile devices are driving the next wave of Internet services. Many older companies won't survive the change, while fortunes will be made by the first movers in the field. Where does Google fit in? What's the fortune-making change? Check out our latest free report: "The Two Words Bill Gates Doesn't Want You to Hear..." Click here for instant access to this free report.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
$2,359.50 (5.11%) $114.66

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.