Google Inc. (NASDAQ: GOOGL) reported fourth-quarter and full-year 2014 results after markets closed Thursday. For the quarter, the search engine behemoth reported adjusted diluted earnings per share (EPS) of $6.88 on revenues of $18.1 billion, including traffic acquisition costs (TAC). In the year-ago quarter, Google posted EPS of $6.70 on revenues of $16.86 billion. Analysts were estimating EPS of $7.11 on revenues of $18.46 billion including TAC.

Excluding traffic acquisition costs of $3.62 billion, Google’s revenues totaled $14.48 billion for the quarter. The majority of TAC — $2.66 billion — was paid to Google’s network members. Another $968 million was paid to distribution partners and others who direct traffic to Google’s website.

For the full year, revenues totaled $66 billion compared with $55.52 billion in 2013, and EPS totaled $21.02 on a GAAP basis, compared with $19.07 in 2013. Consensus estimates called for EPS of $25.78 on revenues of $66.39 billion.

Google’s quarterly cost of revenues rose from $6.25 billion in the fourth quarter of last year to $6.92 billion this year, a rise of nearly 11%. Total costs and expenses rose about 21% from $11.28 billion to $13.7 billion.

Paid clicks in the fourth quarter rose approximately 14% year-over-year and about 11% sequentially, while cost-per-click fell approximately 3% year-over-year and by the same amount sequentially.

Net cash from operations totaled $6.36 billion in the quarter, up from $5.24 billion a year ago, and free cash flow slipped from $2.98 billion in the fourth quarter of 2013 to $2.81 billion. The company reported cash, cash equivalents and securities totaling $64.4 billion at the end of December.

Google invested $3.55 billion in capex during the fourth quarter, primarily for real-estate purchases, production equipment and data center construction. The total was about $1.3 billion more than the company spent in the fourth quarter a year ago. For the full year, Google’s capex totaled nearly $11 billion, up from $7.36 billion in 2013.

Quarterly advertising revenues rose from $14.06 billion in the fourth quarter of 2013 to $16.15 billion in 2014, and represented 89% of the company’s total revenues for the quarter.

The company’s foreign exchange risk management program provided a benefit of $148 million in the quarter, but currency translation effects still cost the company $616 million in revenues on a constant currency basis compared with the fourth quarter in 2013.

Google did not provide a forecast, but the consensus first quarter estimates call for EPS of $6.88 on revenues of $18.03 billion. For the full year, analysts forecast EPS of $29.82 on revenues of $77.48 billion.

While costs were up, currency exchange rates hit revenues hard. If the dollar had remained at its level at the end of the third quarter of 2014, revenues would have been about $540 million higher and beat expectations.

Shares traded down about 2.9% at $498.75 in after-hours trading. The 52-week range is $490.91 to $615.05, and shares closed Thursday at $513.23. Thomson Reuters reported a consensus price target of around $634 before the earnings report.

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