Goldman’s Take On GOOG: "We Await More Color On The Company’s Disappointing Eesults "

The squid speaks:

Top line and non-GAAP EPS below the Street. Google reported total net revenue of $10.78bn and non-GAAP EPS of $9.03. This compares to our estimates of $11.76 bn and $10.23, respectively, versus consensus of $11.89 bn and $10.15. Motorola sales were $2.58bn versus our estimate of $2.81bn and consensus of $2.87bn, accounting some $300mn of the miss. We note that Google standalone operating margin was 34.3% in the quarter, our forecast of 36.6%.

Paid click and CPC growth below expectations. Paid click growth came in at 33% yoy versus consensus of 34% yoy. We estimate the 1 point miss accounted for approximately $75mn of the top-line miss. Google’s CPC’s declined 15% yoy compared to our forecast of a decline of 11% yoy, in line with consensus. We estimate the 4 point miss drove $300mn of the top line miss. The miss on CPCs and paid clicks coupled with the recent declines in comScore global desktop search queries will raise concern the mobile, including tablets and phones, growth is outstripping desktop faster than expected. Of particular note, tablets carry a great TAC impact than phones given Android’s insignificant market share on these devices.

Conference call today at 4:30PM. We await more color on the company’s disappointing results on this afternoon’s conference call.

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