Google reported adjusted earnings of $1.54 per share, well below Wall Street’s forecast for $1.76 per share, even though it brought in higher revenue than expected.
Google shares were halted for the early part of the aftermarket session, then dropped significantly when trading resumed. Shares were down $68.17, or 15.8 percent, trading at $364.49 on the INET electronic exchange, from their close on the Nasdaq at $432.66.
From Google’s release:
“We are very pleased with our results for the fourth quarter as we
achieved excellent performance across our businesses,” said Eric
Schmidt, CEO of Google. “We generated significant revenue growth in
our core search and advertising business, driven by continued strength
in traffic and monetization. We will continue to invest significantly
as we develop innovative new products and as we extend our core
technologies to new user access points and to different channels.”
Q4 Financial Summary
Google reported revenues of $1.919 billion for the quarter ended
December 31, 2005, an increase of 86% compared to the fourth quarter of
2004 and an increase of 22% compared to the third quarter of 2005.
Google reports its revenues, consistent with GAAP, on a gross basis
without deducting traffic acquisition costs, or TAC. In the fourth
quarter, TAC totaled $629 million, or 33% percent of advertising
Huh. I am not a stock picker, but I guess the fellow from Yahoo is feeling pretty smart about now.