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Google Q1 revenue falls short of Wall Street targets on plummeting ad prices

Google

Google Inc’s first-quarter revenue fell short of Wall Street targets and margins narrowed as the price of its ads persisted to decline, pushing its stakes sharply lower.

Shares of Google were down 5.7 percent at $525 in after-hours trading on Wednesday.

The number of “paid clicks” by consumers on Google’s ads increased by 26 percent in the first quarter, disappointing some analysts that had anticipated for stronger volume growth. And the average “cost per click” declined 9 percent, extending a downward trend as mobile advertising, typically cheaper than traditional online ads; make up a bigger slice of its business.

“It’s an average quarter from a great company,” alleged BGC Partners analyst Colin Gillis. Supplementing that – “It’s the same old story. Paid clicks were a little lighter than people might have hoped, CPC declines were a little higher than people would have liked, expenses continued to rise.”

Operating income fell to 32 percent of revenue on an adjusted basis, from 34 percent in the year-ago period.

Google’s core Internet business revenue climbed 19 percent to $15.42 billion in the first quarter from $12.95 billion in the year-ago period.

It posted $3.45 billion in net income, or $5.04 per share, in the three months ended March 31, compared to $3.35 billion, or $4.97 per share, in the year-ago period. Excluding certain items, Google earned $6.27 per share. Google reported a $198 million net loss from “discontinued operations,” which includes the Motorola smartphone business. Google announced plans in January to sell the money-losing business to China’s Lenovo Group for $2.91 billion.

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Jawed Akhtar

A Journalist by interest and a Music Enthusiast by passion. Wedded to Mother Nature, Jawed indulges his aesthetics in travelling and reading books of varied genres. Having covered News stories for top Dailies in his formative years, that is, he is game for tryst with Technology at Techmagnifier.

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