Google's revenue grew more slowly than expected in the fourth quarter.
Patrick Pichette, the company's Chief Financial Officer, told investors on a conference call that the strong dollar reduced revenue by more than $400 million after taking account of currency hedges. If not the pressure of the dollar, revenue would have risen roughly 20%.
The Silicon Valley Internet giant said fourth-quarter
revenue, excluding payments to other companies that syndicate its ads,
rose 17%, to $14.5 billion, from $12.4 billion in the same period a year
earlier. Analysts polled by FactSet had projected revenue on that basis
of $14.7 billion, says The WSJ.
Net income grew 41% to $4.8 billion, or $6.91 a share, from $3.4 billion, or $4.95 a share. Excluding certain expenses like stock compensation, Google reported per-share earnings of $6.88. Analysts had expected $7.12 on that basis, according to FactSet.
The firm's growth has been hampering as search queries stall on personal computers, where Google makes more money from clicks on ads. Although historically ads on mobile devices have been a liability, Mr. Pichette said “strength in our mobile search” spurred revenue. Google doesn’t break out revenue from mobile devices.
The advertising revenue Google generates from its own websites, including its search engine and YouTube, increased 18% in the fourth quarter compared with the prior year and the number of paid clicks rose about 14% compared with the same period a year earlier.
Having $64.4 billion of cash at the end of the quarter, Google could face more pressure from Wall Street to return cash to shareholders via share buybacks or a dividend, says The WSJ. Mr. Pichette explained the company regularly reviews all options for its cash but had nothing to announce.
There is fear that Google’s revenue could take another hit if the company were to lose the leading position as the default search engine for Apple Inc.’s Safari browser, which is the way most iPhone users access the Internet.
This past quarter Google missed a similar deal to be the default search engine for Mozilla Corp.’s Firefox Web browser.
