Expenses, Motorola Losses Eat Into Google’s $14.10 Billion Q3 Revenue

consolidated-quarterly-revenues

Google revenues topped $10 billion for the fourth quarter in a row, up substantially from the $12.2 billion reported in Q2 2012. The reported Q3 2012 $14.10 billion in revenue is another new record and reflects a 45 percent increase over the same quarter last year.

However, profit excluding some items was $9.03 a share, not reaching analysts expectations. They had predicted, on average, an estimated profit of $10.65 a share on sales of $11.8 billion.

Some, like Business Insider’s Henry Blodget, blame Motorola for the losses. “The news may not be quite as bad as some investors initially feared. Although Google's core business modestly missed expectations, it was Motorola that was the bigger problem,” he wrote. Blodget later continued, “You would have to be pie-eyed to think that Google could acquire a massive dying business it knew nothing about and fix it in a couple of quarters.” He doesn’t believe investors should worry; the core business is still performing.

As we reported last quarter, this was to be the first reporting period with Motorola completely factored in. Motorola revenues were $2.58 billion ($1.78 billion from the mobile segment and $797 million from the home segment), or 18 percent of consolidated revenues in the third quarter of 2012.

Motorola’s mobile revenue was a disappointment for analysts, as they’d projected $2 billion. Overall, Motorola's adjusted operating loss was -$151 million, versus an anticipated -$25 million.

google-stock-q3-dropUsually, we don’t see Google’s report until about an hour before their earnings call, scheduled for 4:30 p.m. EST. However, the report seems to have been leaked and showed up early on the SEC site. It says “Pending Larry Quote” and should not have been published until after the market closed.

Despite increased revenue, costs-per-click were down 15 percent and traffic acquisition costs increased. The market reaction was swift, with stocks plummeting up to 11 percent until Google managed to cease trading and stop the bleeding at 12:50 pm EST.

Here's a quick breakdown of the Q3 numbers as reported in the draft filing:

Google Sites Revenues

Google-owned sites generated revenues of $7.73 billion, or 67 percent of total Google revenues, in the third quarter of 2012. This represents a 15 percent increase over third quarter 2011 Google sites revenues of $6.74 billion.

Google Network Revenues

Google’s partner sites generated revenues of $3.13 billion, or 27 percent of total Google revenues, in the third quarter of 2012. This represents a 21% increase from third quarter 2011 Google network revenues of $2.60 billion.

International Revenues

Google revenues from outside of the United States totaled $6.11 billion, representing 53% of total Google revenues in the third quarter of 2012, compared to 54% in the second quarter of 2012 and 55 percent in the third quarter of 2011.

Google revenues from the United Kingdom totaled $1.22 billion, representing 11% of Google revenues in the third quarter of 2012, compared to 11% in the third quarter of 2011.

Paid Clicks

Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 33 percent over the third quarter of 2011 and increased approximately 6 percent over the second quarter of 2012.

Cost-Per-Click

Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 15 percent over the third quarter of 2011 and decreased approximately 3 percent over the second quarter of 2012.

Cash

As of September 30, 2012, cash, cash equivalents, and short-term marketable securities were $45.7 billion.

Employees

On a worldwide basis, we employed 53,546 full-time employees (36,118 in our Google business and 17,428 in our Motorola business) as of September 30, 2012, compared to 54,604 full-time employees as of June 30, 2012.

Google’s Q3 2012 earnings call gets underway at 4:30pm ET and will be webcast live from their Google Investor Relations YouTube account.