Lots of after-market earnings activity this Thursday, especially in the tech sector. Google (GOOGL), Amazon (AMZN) and Microsoft (MSFT) all reported quarterly earnings after the bell, all of which look to impress late-day traders. Every one of these large firms brought higher revenues than expected, and the stocks are headed higher since the announcements were made.
Google produced earnings of $5.20 per share (accounting for traffic acquisition costs [TAC] and stock-based compensation) on revenues of $14.91 billion (ex-TAC). This now makes a string of 6 straight quarters Google has failed to beat expectations on the bottom line.
There are a few concerning elements in Google's earnings report, specifically relating to paid clicks and costs per click, two main metrics for the search giant: while aggregate paid clicks were up 13 percent year over year, they slipped by a percentage point from Q4. Paid clicks on Google websites fell by 3 percent in the quarter. Costs per click were down 7 percent in aggregate year over year, and 13 percent lower for Google sites.
Total TAC as a percentage of advertising revenues was 22 percent, down a point from a year ago. Total ad revenues (not including TAC) reached $15.5 billion in the quarter. That's 11 percent higher than a year ago, but 5 percent down from the December quarter. As Google's conference call gets underway, investors will be checking for ways to increase its ad revenues, such as places like mobile and local search.
Amazon, for its part, has now posted its second EPS beat in a row, posting -12 cents per share which was a penny higher than the Zacks consensus estimate. Revenues of $22.72 in the quarter topped the $22.41 billion expected, and increased 15 percent from Q1 2014. However, revenue guidance for the June quarter is in the $20.6B – $22.8B range; the Zacks consensus is near the top of that, at roughly $22.2B.
CEO Jeff Bezos wasted little time pointing to the success of Amazon Web Services, which he cited "is a $5 billion business and still growing fast — in fact it’s accelerating." Amazon has for years made big investments in making faster deliveries, and it looks as if the company expects to recoup going forward.
Microsoft posted earnings of 61 cents per share, easily beating the Zacks consensus estimate of 51 cents. That said, analysts had been downwardly revising Microsoft earnings expectations for its fiscal Q3 over the past couple months. Revenues of $21.7 billion handily beat the $21.0 billion we had expected, so Microsoft has performed well this quarter.
The after-market is currently applauding all three companies: GOOGL is up 3.5 percent, AMZN up 4.3 percent and MSFT up 3.1 percent in late trading.
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