Google on Thursday allayed concerns about its paid click growth rate with first quarter earnings that topped Wall Street’s low expectations.
Google reported first quarter net income of $1.31 billion, or $4.12 a share, on revenue of $5.19 billion. Excluding traffic acquisition costs of $1.49 billion, revenue was $3.7 billion. Excluding charges Google’s earnings were $1.54 billion, or $4.84 a share.
According to Thomson Financial, Google was expected to report first quarter earnings of $4.52 a share on revenue of $3.6 billion.
The search giant’s earnings results (statement and preview) include the operations of DoubleClick, but the company noted that the impact from its latest acquisition was immaterial for revenue and slightly dilutive on earnings.
On a conference call, CEO Eric Schmidt said: “It’s clear to us that we’re well positioned for 2008 and beyond” regardless of the economy. He added that paid click growth of 4 percent in the first quarter from the fourth quarter was higher than comScore noted. Paid clicks were up 20 percent from a year ago and 4 percent from the fourth quarter. Comscore had Google’s first quarter paid click growth rate at 1.8 percent.
“We’re showing fewer, but much better ads in each cycle,” said Schmidt.
Compared to a year ago, Google’s revenue was up 42 percent.
By the numbers (revenue figures don’t exclude TAC):
- Google site revenue was $3.4 billion, up 49 percent from a year ago and 9 percent from the fourth quarter. Google network revenue (AdSense programs) was $1.69 billion, up 25 percent from a year ago.
- International revenue was $2.65 billion, or 51 percent of total revenue. Google outlined what kind of bump it got from a weak dollar: “Had foreign exchange rates remained constant from the fourth quarter of 2007 through the first quarter of 2008, our revenues in the first quarter of 2008 would have been $18 million lower. Had foreign exchange rates remained constant from the first quarter of 2007 through the first quarter of 2008, our revenues in the first quarter of 2008 would have been $202 million lower.”
- Paid clicks were up 20 percent from a year ago and 4 percent from the fourth quarter, which was largely expected.
- Google generated cash flow of $1.78 billion in the first quarter, up from $1.69 billion in the fourth quarter.