Google shares hit an all-time high Friday morning at the opening bell, climbing 12.6% to officially break the $1000 mark. Several brokerages raised their price targets to a range of $880 to $1,175.
The swell of investor confidence came after Google revealed its Q3 earnings report, in which it beat Wall Street’s expectations with higher than anticipated revenue and EPS. Revenue was up 12% year-over-year to $14.9 billion, beating out analysts’ expectations of $14.8 billion. Net income came in at $3.64 billion, compared to $2.96 billion in Q3 2012, and EPS came in at $10.74, compared to $8.87 in the year-ago quarter. Wall Street was anticipating an EPS of $10.34.
While cost-per-click fell 8%, that was offset by a 26% increase in paid clicks—the highest growth its seen in the last year. J.P. Morgan analysts were expecting 21.5% growth.
"We view solid paid clicks growth to be a good indicator of demand, driven by the continued shift to mobile," J.P. Morgan analysts said. J.P. Morgan raised its price target for Google to $1,150 from $1,000.
“Google had another strong quarter with $14.9 billion in revenue and great product progress,” said CEO Larry Page, in a statement. “We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device.”
Speaking to Google’s continued growth, Page noted: “people tend to overestimate tech in the short-term but underestimate it in the long run. For years, everyone talked about the multiscreen world. Now it’s arrived, but on a scale few imagined.” Page listed off phones, computers, Google Glass, the home, and…watches?... Hmmm….methinks that was a strategic name drop.
To date, Page said, more than one billion Android devices have been activated worldwide, and 1.5 million are lit up each day.
Also seeing big numbers these days: YouTube, specifically where mobile is concerned. Today, some 40% of YouTube’s traffic comes from mobile, compared to 25% last year and just 6% in 2011. Just 6% of YouTube’s traffic came from mobile two years ago! How is that even possible?! That means 94% of YouTube’s traffic came from people actually sitting down at a computer to watch videos of dogs on skateboards.
But probably the biggest news in the earnings call was Larry Page’s announcement that he’s won’t be on every earnings call from here on out. Page noted that his absence from future calls is purely a matter of prioritizing his time.
Last year, Page missed the annual shareholders’ meeting, leading to speculation about health problems. Page put the rumors to rest earlier this year when he revealed that he suffers from a rare and chronic medical condition that causes paralysis of the vocal chords, which limits him in his ability to speak.
“About two years ago, when I became CEO again, my goal was to make sure Google maintains the passion and soul of a startup as we grow,” said Page. “Great is just never good enough.”
Image source: familyinnewyork.com