Google Kicks Earnings Into High Gear

Google Inc. (NASDAQ: GOOG) is out with earnings and the results are a bit stunning. The internet search giant (and digital amalgamated conglomerate) turned in earnings of $7.68 EPS and ex-TAC revenues were $6.92 billion. Thomson Reuters had consensus estimates of $7.86 EPS and $6.55 billion in ex-TAC revenues. Revenue growth of 32% is hard to beat, especially because Thomson Reuters estimates for third quarter ex-TAC revenue was $6.88 billion. That comes to $9.03 billion in revenues if you include the Traffic Acquisition Costs. TAC came to $2.11 billion, or about 24% of advertising revenues.

Net cash from operations was $3.52 billion on $2.6 billion in free cash flows and Google ended with $39.1 billion in cash. That means that close to 23% of Google’s $170 billion in market cap is cash.

Operating expenses continue to rise, but at a somewhat slower pace. They came to $2.97 billion, or 33% of revenues, from $1.99 billion, or 29% of revenues, a year ago. That gap narrowed by 4 percentage points compared with last quarter, but if you tally this up in raw dollars rather than just the four percentage points of revenues, operating expenses are up about 38% by our calculations versus the 32% growth in revenues.

Google-owned sites revenues were up 32% to $6.23 billion and are again 69% of total revenues. Google’s network revenues showed that partner sites generated revenues in AdSense of $2.48 billion, or 28% of total revenues, up about 20% from the same period a year ago.

International revenues are now 54% of revenues at $4.87 billion. Google keeps making money on its currency hedges. Revenues would have been $167 million or $4 million lower depending upon method of calculations. Paid clicks rose 18% from a year ago and 4% sequentially.

Cost-Per-Click rose 12% from a year ago, and rose 6% sequentially. Google’s headcount continues to grow as it employed 28,768 full-time employees at the end of the quarter versus 26,316 at the end of of the first quarter of 2011.

Today’s story from Google is cash from booming revenue, free cash flow, and cash in the bank.After-hours trading has pushed Google shares up more than 10% less than half an hour after the close, to $580.10, after the stock fell nearly -1.5% in daily trading today. The 52-week trading range is $447.65-$642.96.

Paul Ausick