By William Trent, CFA of Stock Market Beat
Google reported revenues of $3.66 billion for the quarter ended March 31, 2007, an increase of 63% compared to the first quarter of 2006 and an increase of 14% compared to the fourth quarter of 2006. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC. In the first quarter of 2007, TAC totaled $1.13 billion, or 31% of advertising revenues.
GAAP EPS for the first quarter of 2007 was $3.18 on 315 million diluted shares outstanding, compared to $3.29 for the fourth quarter of 2006 on 313 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2007 was $3.68, compared to $3.18 in the fourth quarter of 2006.
So that’s where Yahoo’s revenue’s went. As we noted in our earnings preview, consensus expected $3.30 (non-GAAP) on $2.5 billion in revenue (net of TAC) this quarter and $3.41 on $2.63 billion next. Despite being twice Yahoo’s size, Google grew its revenues nine times as fast. The financial statements yielded virtually nothing worth criticizing, so we’re stuck with Google’s practice of not issuing guidance.