It’s good to be Google.
Google Misses Its Q4, and Wall Street Is Fine With That
In other news: Google Glass didn’t work, and Google’s finally ready to admit that.
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Peter Kafka covered media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.
Somebody else might see their stock tank if they missed their revenue and earnings goals, but Google did just that, and now its stock is headed up, a couple percent in after-hours trading.
Earlier Thursday afternoon, immediately after the search giant’s numbers hit the wires, Google shares were down a couple percent. But Google CFO Patrick Pichette was able to convince investors that the numbers were better than they looked, because there was “noise” in the company’s P&L.
Two examples of that: Currency exchange issues that depressed the company’s revenue in markets like Japan, and some one-time expenses — like a $585 million Silicon Valley office complex — that pushed down earnings.
Pichette also took pains to tell investors that while Google spent lots of money on lots of things last year — this is the company that made a giant bet on magic glasses, after all — it wasn’t going to set its stacks of cash aflame, just for giggles.
And here’s where Pichette said something Google wouldn’t say out loud before: Its Glass project was a dud. Pichette used the super-goggles as an example of a venture that showed “promise” but wasn’t working, so the company was going to “take a pause and reset our strategy.”
In other words: Remember when we put out that silly press release about Glass’s “graduation” from Google’s experimental division? That’s a euphemism for “didn’t work, so we’re going to pull back.” Also, remember that next time we put out a press release.
Earlier:
A first look at Google’s Q4: Net revenue of $14.48 billion and earnings per share of $6.88. Wall Street was looking for something like $14.76 billion and $7.12.
Google shares are bouncing around a bit in after-market trading: I’ve seen the stock dip more than 3 percent, but it has edged back up and is now up about 1 percent as of 5:19 pm ET.
Google’s earnings call kicks off at 4:30 eastern. Here are a few numbers to ponder until it begins:
- A reminder that even if Wall Street isn’t pleased with Google’s numbers, a mere mortal would gasp at them. The company had actual, by-the-books earnings of $4.76 billion last quarter, up from $3.38 billion a year ago.
- Google spends an enormous amount of money: Last quarter it dropped $3.55 billion on capital expenditures, “the majority of which was for real estate purchases, production equipment, and data center construction.” And then there’s this great deadpan, from a company that is investing in space goggles, driverless cars and its own fiber-optic cable business: “We expect to continue to make significant capital expenditures.”
- Google also employs an enormous number of people: 53,600 as of the end of the year.
I’m going to liveblog this call, because if I’m going to listen to it I may as well type while I do it. Ready? Ready!
This article originally appeared on Recode.net.
