July 18, 2015
Google Inc., NASDAQ: GOOG, GOOGL, Beats Earnings Estimates: Shares Soar After-Hours

After the market closed today, Google Inc. (NASDAQ: GOOG, GOOGL) reported second quarter 2015 earnings per share figures of $6.99, handily topping consensus expectations of $6.71 by Wall Street analysts. As of 7:00 p.m. the GOOGL shares are up $72.66 or 11.93 percent to $674.00 in after-hours trade. The GOOG shares are up $64.15 or 10.89 percent to $643.00.

Consolidated revenues for the second quarter were reported growing from $15.96 billion to $17.73 billion on a year-over-year basis. Net income was reported at $4.93 per share, or $3.93 billion up from $3.55 per share or $4.88 billion in the second quarter of 2014. Google's cost-per-click fell 4 percent versus second quarter 2014 results when CPC had also fallen, at that time by 6 percent. Over the second quarter, the technology giant spent $14.35 billion for sites to carry its advertisers' content, up 14 percent from 2014.

In an Investor's Business Daily article, Google Chief Financial Officer Ruth Porat attributed the strong quarter to continued growth in Google's key products including its bread and butter search business, mobile, and other factors.

"Our strong Q2 results reflect continued growth across the breadth of our products, most notably core search, where mobile stood out, as well as YouTube and programmatic advertising."
The difference between the Class A (GOOGL) stock and the Class C (GOOG) shares is that the Class A shares carry one vote, whereas the Class C shares have no voting rights. Neither stock pays a dividend and each tends to trade in sync with the other, to varying degrees. The average daily trading volume is near 1.7 million shares for both.

After-hours trading today represents new price highs for both classes of shares. Before today's earnings, consensus analyst EPS estimates for the GOOG Class C shares were calling for growth of 10.80 percent this year and 15.70 percent next year. Over the next five years EPS for the GOOG shares was forecast to increase at an average rate of 15.04 percent annually. Further revisions from analysts may follow the news.

The price of the GOOG Class C ranged between $500 and $600 since first being issued in 2014. If it holds, this evening's move will likely represent a gap on traders' charts tomorrow, meaning that tomorrow prices for Google shares will likely open and trade at prices never seen before in regular trading. This evening's move brings the performance of the stock in 2015 to close to 27 percent.

It is currently estimated that Google will generate a staggering $74.31 billion in sales in 2015 and increase that figure 15 percent to $85.30 billion in 2016. Not many companies with the revenue-generating power of Google have the ability to grow sales figures by such healthy rates. Google carries $6.89 billion in debt.

[Photo by Daniel Barry / Getty Images]