Google Profit Falls On Expenses, Revenue Misses Estimate

(RTTNews) - Google Inc (GOOG, GOOGL) on Thursday reported a decline in third-quarter profit, hurt by expense and impairment charges that offset a 20 percent climb in revenue. However, revenue missed Wall Street estimates as ad prices continued to weaken.

Google shares slid about 2.5 percent in after-hours trade on the Nasdaq.

While Google has benefited in terms of ad volume from mobile and video advertising, concerns remain over weak ad pricing. Nevertheless, the company sounded positive, saying it expects growth in its advertising and emerging businesses.

Google said its average cost-per-click, or the payment from advertisers, for the quarter slid 2 percent from last year, but smaller than the decline of 6 percent in the second quarter. Meanwhile, aggregate paid clicks for the quarter jumped 17 percent year-over-year.

Google, based in Mountain View, California, posted quarterly net earnings of $2.81 billion or $4.09 per share, compared with $2.97 billion or $4.38 per share last year.

Results for the quarter included an impairment charge of $378 million related to a patent licensing royalty asset acquired in connection with the purchase of Motorola, stock-based compensation expense of $997 million, and a loss from discontinued operations of $185 million.

Excluding items, adjusted earnings for the quarter were $6.35 per share, compared with $5.63 per share in the prior year.

On average, 43 analysts polled by Thomson Reuters expected earnings of $6.53 per share for the quarter. Analysts' estimates typically exclude special items.

Google's revenue for the third quarter climbed to $16.52 billion from $13.75 billion a year ago.

Thirty-four analysts had a consensus revenue estimate of $16.57 billion for the quarter.

Revenue from the company's own websites increased 20 percent year-over-year to $11.25 billion, and revenue from network business climbed 9 percent to $3.43 billion.

Traffic acquisition costs, the portion of revenue Google shares with its partners, increased to $3.35 billion from $2.97 billion last year. Other revenues for the quarter rose 50 percent to $1.84 billion.

On Wednesday, Google announced three Android-powered, Nexus-branded devices, as part of efforts to taken on Apple Inc (AAPL).

On Wednesday, Google unveiled the Nexus 6 smartphone, Nexus 9 tablet and Nexus Player set-top box, the first device running Android TV. The company also introduced a new version of its Android operating system, dubbed the "Lollipop" or Android 5.0.

GOOGL closed Thursday at $536.92, down $3.81 or 0.70%, on a volume of 3 million shares on the Nasdaq. In after hours, the stock dropped $13.03 or 2.43%, at $523.89.