Earnings: Google Back To Growth In UK After Managing Exchange Rates
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SEE ALSO: Earnings: Google Beats Lowered Expectations
Google (NSDQ: GOOG) returned to revenue growth in the UK for the first quarter of 2009, as a programme to manage foreign exchange fluctuations allowed it to haul seven percent more from Britain than the previous three months, at $733 million (£491.7 million).
Google doesn’t report UK earnings in pounds so it’s hard to see true figures. The bounce-back was a seasonal uptick for the quarter, CFO Patrick Pichette said during Google’s analysts conference call - that’s “the normal pattern for the UK, but not as much as prior years due to the weakness in travel and finance” advertising. And, as he observed, it’s still nine percent down from the year before. Also the proportion the UK contributes to Google’s total earnings fell to 13 percent from 12 percent three months ago and 15 percent a year ago.
Google’s UK earnings peaked 12 months ago and, as our chart shows, slid in each quarter since as the pound-to-dollar rate fell and the economy turned bad. But this time Google says it’s scored a $154 million revenue boost from a foreign exchange risk management programme. The UK in particular “benefited from a significant gain from the expiration of some (profit margin) pound hedges” which were set in Q308 and began expiring in Q109, Pichette said. He refused to give UK-specific gains that resulted from the measure.
Ignoring this currency programme, had currencies remained constant, non-US earnings would have been $120 million higher than the previous quarter, and $429 million more then the year before. They totaled $2.88 million, making 52 percent of total income. Overall, Google beat expectations with net profit 10 percent up on last year - see paidContent.org’s full coverage.
@robertandrews
Apr 16, 2009 3:11 PM ET
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