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Internet search engine giant Google Inc. (NASDAQ:GOOG) saw its shares dipped to as low as $575 a share in after-hours trading as fourth quarter report for 2011 fell short of analyst expectations.
Google posted a 25% increase compared to the same period in 2010 to US$8.13 billion revenues, below the average analysts forecast of US$8.41 billion.
Analysts had hoped for US$10.50 a share before costs, whilst the company only posted US$9.50. The number of clicks rose by 34%, yet profits from each click was down 8%. This is viewed as a vital statistic for Google, as it earns from page views from its website at a cost-per-click basis.
This decline resulted from lower charges on searches using mobile devices as well as cost charges in emerging markets.
Demands from Europe as well as a stronger dollar were cited as reasons for the disappointing performance.
“In large part, it is due to Europe,” commented Sameet Sinha, an analyst at B. Riley & Co. Google only accounted 5% increase in ad spending in Europe compared to 20% during the first half.
Revenue from international sales was down to 53% from 55% during the third quarter.
Google actually happy with the clicks
Nonetheless, Larry Page, Chief Executive of Google, is happy with the company’s performance.
“Google had a really strong quarter ending a great year”
Despite disappointing expectations, Google numbers have gone up. Net income for the quarter is at US$2.741 billion, up from US$2.54 billion from the same period on the previous fiscal year. The figures equate to US$8.22 profits per share, as compared to US$7.81 per share.
Future plans
Just recently, one of Spain’s largest banks, BBVA has signed a contract to migrate its 110,000 employees to Google Apps, the biggest contract ever for Google’s cloud-computing service.
The contract is also a benchmark as the company is the first financial institution to use the “public cloud” rather than a private one. “The banks are now moving to the cloud”, said Sebastien Marrotte of Google Enterprise Europe.
Company Spotlight
Google is a multi-billion dollar search engine company, offering a broad range of products and associated services with over 180 domains translated in different languages. The company was founded by Larry Page and Sergey Brin in 1998, during their graduate school days in Stanford University. It is public listed company on the NASDAQ in 2004.
Google shares were valued US$639.57 a share at the NASDAQ Board as of 20 January 2012.
References
↑ Company History
↑ Google revenues worse than expected
↑ Google Sales, Profit Miss Estimates as Ad Prices Decline
↑ Google persuades Spanish bank BBVA to use the cloud
↑ Google Inc Company Overview
↑ Company Financial Information
