Google posts weaker-than-expected Q1 results
Google shares slipped as much as 6.2 per cent in extended trading on Wednesday after the internet search giant reported weaker-than-expected revenues and profits for the first quarter.
The company announced that its per-share profits ex-items climbed 4.5 per cent to $6.27. A group of analysts surveyed by Thomas Reuters had pegged their average expectation at $6.39. Revenue, excluding what the company pays to other websites for carrying adverts, increased 22 per cent to $12.19 billion. Analysts had expected revenue of $12.23 billion.
Increasing number of Google users are migrating to mobile devices like smartphones and tablets, which are generating less ad money than desktops.
Gene Munster, a senior analyst with Piper Jaffray Cos, said, "Obviously mobile's growing faster than desktop. The core question that investors are dying to answer is just how that gap closes. They're not showing it in the results yet."
S&P Capital IQ Inc analyst Scott Kessler said that mobile was apparently the single biggest risk for the company over the near-term. Both Gene Munster and Scott Kessler have the equivalent of a buy rating on Google stock.
Net income jumped to $3.45 billion or $5.04 per share during the quarter ended March 31, from $3.35 billion or $4.97 per share in the corresponding quarter of the previous year.
Separately, Google rival Yahoo reported its first revenue gain in as many as five quarters, though growth remained lackluster.