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Revenues increase notably, Motorola still posting a loss this quarter

Google has just released its Q1 2013 earnings report, and while we listen in on the earnings call we're going to break down some of the raw numbers for you:

  • $13.97 billion in revenue for the quarter, up 31-percent year-over-year
  • $3.48 billion in operating income, up slightly y-o-y but down as a percentage of revenue
  • Google-owned sites represented $8.64 billion of those revenues
  • Google Network (partner sites) represented $3.26 billion of revenue
  • Motorola posted $1.02 billion in revenues, 7-percent of Google's total
  • Motorola ended with an operating loss of $271 million for Q1

A strong quarter for Google is seeing revenues increase largely over the same quarter last year, but while revenues did increase in nominal terms they did decrease in terms of share of revenues. Income from each different area of Google were strong, and though the number of paid clicks (for advertisements) increased about 20-percent the cost-per-click fell slightly by 4-percent. Speaking to Motorola specifically, the unit had $1.02 billion in revenue for the quarter, but is still posting a loss of $271 million in the end.

Source: Google


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Google Q1 2013 earnings: $13.97 billion in revenue, $3.48 billion profit


Motorola Q3 2012: $2.58 billion in revenue with an operating loss of $527 million
Motorola Q4 2012: $1.51 billion in revenue with an operating loss of $353 million.
Motorola Q1 2013: $1.02 billion in revenue with an operating loss of $271 million.

By Q4 2013, I'm expecting Motorola to no longer be operating at a loss.

Sure, the net losses on Motorola have gone down by about $250 million (on a very small sample size, I might add). But at the same time, revenues have also decreased by $1.55 billion. Hard to say that they're going to start getting into the black soon. If they do, it's more likely due to just trimming the fat (so to speak) and cutting the extremely unnecessary or unprofitable segments, rather than some amazing increase in sales or profitability of the unit as a whole.

Just have to put things in perspective when we talk about post-acquisition earnings. Hard to tell what exactly is going on. Profit doesn't always mean success, and losses don't always mean failure.

There's a lot of fat to trim. The home division was recently sold off (though I'm pretty sure I've read before that the division working on phones was the bulk of the losses). There's also less products going out (what came after the RAZR i/DROID RAZR M/DROID RAZR HD). Oh and the severance packages for the recently let go employees.

Bringing in billions while operating at a loss in the millions has been Motorola's reputation for awhile now, even before Google. Their failure led to Google making a play to purchase them. Now that it's happened, I'm expecting Motorola to turn the corner - be it by shedding or new product.