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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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Google. Motley Fool newsletter services recommend Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool's blog network, click here for information.