Google announced first-quarter earnings Thursday that fell short of expectations. But, revenue was up 12 percent from last year, to $17.3 billion.
The company reported earnings per share of $6.57 compared to last year’s $6.27 of the same quarter. Google did cut down on capital expenditures to $2.92 billion compared to $3.6 billion last year.
Q1 marks the sixth consecutive quarter that Google’s earnings have disappointed investor expectations. Analysts on Wall Street had expected the company to report earnings per share of about $6.61 and $17.5 billion in revenue, according to Yahoo Finance.
Google CFO Patrick Pichette defended the company’s earnings on a Thursday conference call, saying that currency fluctuations driven by the rising dollar were to blame.
“Excluding the net impact of foreign currency headwinds, revenue grew a healthy 17 percent year on year,” said Pichette, naming strengthened mobile search as a main source of profit.
Another way of gauging Google is by the number of paid clicks, or clicks on advertisements on Google’s site, which was up 13 percent year over year.
Investors saw that the company’s volume of people looking at ads had increased and consequently Google’s stock rose 3 percent in after-hours trading.
But the cost-per-click, or how much money Google makes per click, fell 7 percent. The decline could be a result of a mobile shift, as advertisers have been less willing to pay for ads on phones, which have smaller screens than laptops and desktops.
Still, Pichette argued that the cost-per-click wasn’t falling because of the mobile shift. Instead, he claimed that cost-per-click was falling because more people are watching ads on YouTube instead of the more profitable search ads.
Research and development spending remained steady at $2.7 billion, compared to $2.8 billion last quarter.
Google is concentrating on providing people with answers when they need them, said Chief Business Officer Omid Kordestani.
“The company was built on intent and immediacy,” he said.
To that end, the company is selling Android One phones, simpler smartphones for people who have never owned them before, in six emerging markets including Indonesia and the Philippines. It is also delivering a fast, lighter version of Google search that uses less data in countries like India with less stable Internet connections.
Kordestani also called YouTube, which is the biggest platform for online videos, “the natural home for video advertising budgets.”
Besides earnings falling short of expectations, Google is also facing legal problems. The European Commission has accused Google of monopolizing its shopping results. The regulators’ complaint stated that Google favored its own e-commerce although those weren’t the best deals for consumers. The company could face more than $6 billion in fines.