Google Wins, But Not Enough Juice (GOOG)

Google Inc. (NASDAQ: GOOG) is out with earnings.  The king of search has posted $5.36 non-GAAP EPS and $4.07 billion in ex-TAC revenues.  Thomson Reuters had estimates pegged at $5.09 EPS and $4.06 billion in revenues.  There was a higher whisper number and estimates had crawled higher and higher throughout the last week.

Google does not give guidance, but estimates for next quarter are $4.50 EPS and $4.19 billion in revenues.

TAC revenues were $1.45 billion, or 27% of Ad Revenues.  Total revenues outside the U.S. were $2.91 billion.

• Traffic Acquisition Costs, or revenues shared with Google’s partners, were $1.45 billion, similar to $1.44 billion last quarter. TAC as a percentage of advertising revenues was 27%, same as in the first quarter of 2009 and in the fourth quarter of 2008.
• Paid click growth was up 15% over a year ago, but was DOWN 2% sequentially.
• Google’s headcount was down again. The prior quarter was a drop of 58 to 20,164, but this latest report shows a drop down to 19,786 full-time global employees.
• Cash and equivalents was up to $19.3 billion.

Shares closed up 1% at $442.60 on an unofficial closing bell basis, and its 52-week trading range is $2.47 to $537.05.  The initial after-hours reaction has shares down around $433.00 on the news.

JON C. OGG
JULY 16, 2009