Google’s fourth quarter earnings report beat analyst estimates on revenue, but missed on profits, partly due to losses incurred by the recently-sold Motorola Mobile arm of the company.
The search and advertising titan posted revenue of $16.86 billion for the fourth quarter of 2013, up 17 percent from the previous year and higher than analysts’ estimates of $16.8 billion from Bloomberg. Google reported non-GAAP earnings per share at $12.01, up $1.36 from the same period in 2012, which missed Wall Street earnings forecasts of $12.28, according to Bloomberg. Meanwhile, consolidated net income increased 17 percent from $2.89 billion to $3.38 billion.
The company’s fourth quarter earnings show the strain losses made by the Motorola Mobile unit impacted Google. The Illinois-based handset business posted a $384 million operating loss in Q4 2013. Revenues for the segment dropped from $1.51 billion to $1.24 billion between fourth quarter 2012 and 2013.
News broke today that Lenovo, a Beijing-based legacy hardware vendor, would buy Motorola Mobile from Google for approximately $2.91 billion, pending regulatory approval. Google has maintained ownership over a large number of Motorola’s patents, however.
The company’s numbers without the Motorola division were much more healthy. “Google’s standalone revenue was up 22 percent year on year, at $15.7 billion,” said Larry Page, CEO of Google in a press release. Today, Google’s shares ended the day up 2.57 percent. The company’s stock peaked at $1,194 at 5:03 pm in after-hours trading, and traded above $1,184 as of 6:33 pm (EST).
Though Motorola’s struggles impacted Google’s bottom line, it did not do so inordinately. Net income still increased over last year by just under $500 million, mostly thanks to a strong showing by Google’s advertising services. Aggregate paid clicks jumped almost by almost third (31 percent) from fourth quarter 2012. Cost-per-click, the amount advertisers fork over to publishers when ads draw customer clicks, was down 11 percent from Q4 2012.
Despite disappointing Wall Street’s profit expectations, Google has successfully expanded this year, even in spite of its weakest link. Investors will look keenly to the next quarter to see how the company performs without Motorola.