Google Inc. (GOOG) announced solid growth numbers in its fourth quarter and fiscal 2009 earnings after the bell today. The Internet services giant reported earnings of $6.13 per share for the quarter, soundly beating the Zacks Consensus Estimate of $5.69 per share. In contrast to the general treatment on the Street, we at Zacks prefer the expensing of stock-based compensation, which is reflected in the reported EPS ($6.13) and the Zacks Consensus ($5.69).
And, in anticipation of Google’s earnings report, GOOG shares were up very slightly, even as the Nasdaq as a whole was down on the day. Nevertheless, once Google’s earnings hit the wires, after-market trading sold off GOOG shares.
Sometimes good just isn’t good enough? “As we enter 2010, we remain hugely optimistic…” said CEO Eric Schmidt in Google’s press release. It would seem difficult to read anything negative in that expression. But then the search engine business has been maturing, and impressive growth rates of the last few years may be getting difficult to replicate going forward for GOOG.
Its quarterly reported revenues amounted to $6.67 billion, a year over year increase of 17%. Its Google-owned website revenues are up 16% year over year to $4.42 billion, GOOG’s partner sites brought in an additional $2.04 billion (up 21% from Q409) and international revenues comprised $3.52 billion. Over the past 5 years, Google’s revenues have grown at a compounded annual growth rate (CAGR) of 46.9%, GAAP gross profit at a CAGR of 50.3% and GAAP operating profit at 59.6%.
If one should be tasked to find the elephant in the room, perhaps it is Google’s recently strained relationship with China. The company has denied it plans to pull out of the largest Internet market in the world, but cyber attacks and theft of intellectual property has raised concerns about Google’s position in China.
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