Google posts $2.8 billion second quarter profit
updated 06:10 pm EDT, Thu July 19, 2012
$12.2 billion in revenues makes for 35 percent jump
Google today announced its earnings figures for the quarter ended June 30, showing considerable increases over its totals for the same period last year. The search giant tallied $2.79 billion in net income for the quarter on $12.21 billion in consolidated revenues. In addition to the sizable income growth, this quarter stood out among others for the search company, as it marked the first financial report since Google acquired Motorola Mobility in late May.
The $12.21 billion Google pulled in in revenues for the quarter represents a 35 percent increase over the same quarter last year. Google's revenue numbers are reported on a gross basis without deducting traffic acquisition costs, which were $2.6 billion for the quarter, or 25 percent of advertising revenues.
The $12.21 billion figure includes revenues from Motorola Mobility. Taken separately, Google accounts for $10.96 billion of that figure, while Motorola generated $1.25 billion itself last quarter, or 12 percent of consolidated revenues. About $843 million of Motorola's total came from its mobile segment, while $407 million came from its home segment. Had the company stood on its own, it would have lost $38 million.
Questioned during the company's investor conference call on how Google plans to make Motorola profitable, executives urged patience, claiming that they are still combing through every aspect of Motorola's operations. Additionally, they claimed that, depending on the accounting measures one uses, Motorola could actually be seen as having had a good quarter in light of the expenses incurred during the acquisition.
Also of note with regard to Motorola is the impact the acquisition had on the size of Google's personnel count. The acquisition brought about 21,000 new employees into Google, bringing the company's worldwide headcount to $54,604.
Google's net income for the quarter was up $280 million over the same quarter last year, when the company pulled in $2.51 billion. Over the quarter, the company paid an effective tax rate of 19 percent.
The report also revealed that Google's operating expenses continue to grow; they're up to $4 billion for this quarter, whereas they stood at $2.97 billion for the same quarter of 2011. As a percentage of revenues, though, the company has been able to keep its operating expenses level at 33 percent.
Google's executives weren't too forthcoming on the particulars of most of Google's individual products. Questions during the conference call on how investors should look at the Nexus 7 or Chrome on iOS were largely parried, with executives asking for patience or giving generally positive statements.
YouTube, though, was an opportunity for some detailed discussion. Executives said that the site's users now update 72 hours of video every minute. Meanwhile, daily signups for the site are said to have doubled year over year. The Google representatives made sure to note the company's pride in the site, touting recent efforts to expand its capabilities, as well as plans to live-stream the London Olympics later this year.
