Google chief executive Larry Page said Thursday afternoon that the tech giant had ended its year on a high note, reporting at 17 percent increase in profits.
The company reported earnings per share of $12.01 on $16.68 billion in revenue. Net income was $3.38 billion. Analysts had expected stronger earnings per share of $12.21 on revenue of $16.7 billion. Google stocks were flat in after-hours trading.
Shares of the company have been going strong for months — up 24 percent since Google reported its third-quarter earnings in October. And Google had a fairly good trading day ahead of earnings, closing over 2 percent up at a $1,135 per share Thursday. Much of that bump can be attributed to Google’s announcement that it will sell Motorola Mobility to Lenovo, while keeping the bulk of the pioneering smartphone company’s patent portfolio.
Motorola Mobility, which Google paid $12.5 billion for in 2011 and sold for $2.9 billion, saw its revenue drop from the same period last year, to $1.24 billion from $1.51 billion. The segment recorded a $384 million loss.
Looking ahead, analysts see a rosier picture for Google, particularly now that it’s shed what BGC Financial analyst Colin Gillis called the “Motorola Millstone” in a note to investors Thursday.
Google has been going on an acquisitions spree in the past several months — buying up Nest, as well as a slew of robotics companies — and stirring speculation about products the company might have in the pipeline. In a blog post on the Motorola Mobility sale, Page said Google was still going to be making wearable technology and home gadgets.
Since taking over as CEO in 2011, Page has encouraged Google employees to take on their own projects but has never hesitated to cut the ones that don’t work. In July 2011, he said that Google needed to put “more wood behind fewer arrows” to streamline its product lines.
Company observers, then, will be listening carefully to the company’s earnings call Thursday evening to hear how the Motorola sale may play into a larger product vision for Google. Pacific Crest analyst Evan Wilson said that shedding Motorola removes a “strong headwind” and gives a positive indication that the company may be willing to move quickly away from its mistakes — even costly ones, such as the Motorola deal.
The company’s rate for a cost-per-click — the rate it can charge advertisers when users click on an ad — continues to slide, down 11 percent from the same period last year. Overall, however, the number of clicks rose, up 31 percent, from the previous year. Over the past year, Google has focused on making it easier to place mobile ads, a segment that’s becoming increasingly important for advertisers.
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