Google CEO Larry Page just told Wall Street this was his last conference call for some time. “Going forward I won’t be joining every earnings call.”
- We’re adding the news as it comes out, so refresh this post or click here for updates.
His voice was very quiet on the call as he strained to talk. He has suffered from a degenerative disease and he has partially paralysed vocal cords.
His CFO and chief business officer are “depending on me to prioritise my time,” he said.
He also thanked all Google employees for all the work they have done for him.
It was quite a moment. Although not totally unexpected, quietly dramatic nonetheless.
Google’s Q3 2013 earnings report has propelled its stock back through the $US900 barrier to ~$957 in after-hours trading.
Here are the numbers:
Gross Revenues: $US14.98 billion, up 12% — that’s a beat.
Net income: $US2.97 billion, compared to $US2.18 billion in the third quarter of 2012.
EPS: $US10.74 — that’s also a beat. It’s up compared to $US8.87 in the third quarter of 2012.
Google’s shares broke the $US900 barrier in after-hours trading, up 7.7% to $US957 or even more. The stock is on a huge tear.
Analysts were expecting:
- Gross revenue: $US14.8 billion
- Net revenue: $US11.9 billion
- Earnings per share (EPS): $US10.34
So it’s a decent beat on top and bottom lines. “Google had another strong quarter with $US14.9 billion in revenue and great product progress,” said Larry Page, CEO of Google. “We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device.”
The big revenue boost seems to have come from an increase in paid clicks:
Paid Clicks — Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 26% over the third quarter of 2012 and increased approximately 8% over the second quarter of 2013.
Cost-Per-Click — Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 8% over the third quarter of 2012 and decreased approximately 4% over the second quarter of 2013.
(Remember, as Google serves more paid clicks, the supply increases, so the cost-per-click goes down. What’s important here is that more people are clicking on the ads Google is serving.)
Google published its full set of numbers and analyst materials here.
The Motorola unit looks like the only downside. Its revenue slipped despite launching the flagship Moto X phone:
Motorola Mobile Segment Revenues — Motorola Mobile segment revenues were $US1.18 billion, or 8% of consolidated revenues in the third quarter of 2013, compared to $US1.78 billion, or 13% of consolidated revenues in the third quarter of 2012.
Here’s our live coverage of the conference call:
CEO Larry Page, CFO Patrick Pichette and chief business officer Nikesh Arora are now on the call.
Page is giving an update and plugging the new Chromebook and the Moto X phone.
- His major theme is that people navigating across screens, from device to device, seamlessly, and that this is becoming more normal.
- 40% of YouTube’s traffic comes from mobile, up from 6% two years ago.
- “Velocity and execution” are a big deal, Page says. Google wants to remain like a startup even though it has 46,000 employees.
Now for highlights from the Q&A portion:
How far along are you in voice recognition?
Page: We’ve made tremendous progress, even in the last couple of months the accuracy has caught up quite a bit. [He plugs Google Now on the Moto X]. They’re already super-useful and we have a lot of usage coming from voice.
Enhanced Campaigns — the new system for Adwords which lumps together ad buys across all types of devices from a single platform — how is it working?
Arora: It’s a process. We’re all going through this together … this is definitely the first step we’ve taken toward multi screen and multi device advertising.
Will Google start to take share of TV advertising dollars, which it has not so far?
Arora: Watch time on various online videos sites continues to grow … you’re beginning to see a lot more watch time on multi-screen devices … [it’s more measureable] … that’s a superior opportunity for advertisers … we’re gearing up for it.
Local and transactional — can it be made seamless?
Page: In general the experience for users is not that seamless. There are a lot of different pieces of technology to make commerce happen and so on, and that’s something we’re looking at improving.
Gene Munster of Piper Jaffray wants to know “how real” are self driving cars as a business?
Page: … We’ve made tremendous progress and we’ve driven large amounts of miles. We’ve changed the business from something that wasn’t going to happen at all to something inevitable. That said, it’s still early days. It’s still a ways from being a commercial product. We probably over estimate that in the short term and underestimate it in the long term.
The future of cookies (which Google is considering replacing with a new system for tracking web browsers for advertisers):
Arora: We want to make sure the web stays economically viable … it’s very early right now to talk about what’s going to work and what’s not going to work.
Disclosure: The authors owns Google stock.