Google today reported revenue of $8.58 billion for the first quarter, an increase of 27 percent compared to the same period last year. Meanwhile, its net income rose to $2.3 billion. But that wasn’t good enough for Wall Street. Shares of Google tanked in after hours trading, falling more than four percent.

Google’s non-GAAP earnings per share came in at $8.08, but analysts had expected $8.13, according to StreetInsider. That sent shares down more than $24 in after hours trading, trading at about $550.

Google continues to invest heavily in new products, and the company today said that it plans to make significant capital expenditures in the future.

It certainly has plenty of cash on hand to do, reporting $36.7 billion in cash, cash equivalents  and marketable securities at the end of the quarter. Google also employed 26,316 people at the end of March, up from 24,400 full timers at the end of December.

Alley Insider notes that it was a solid quarter, and that Google remains “robustly healthy.”  However, they wonder what Google is spending all of their money on, pointing out the $890 million capital expenditures for the quarter. (The company notes in the press release that it spent money on data centers, servers and networking equipment).

A Webcast of the earnings call begins at 1:30 p.m.

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  • Adam423

    Google shares won’t bottom out until the antitrust investigations reveal the full extent of Google’s antitrust violations. Watch for Google shares to head down to 400.

  • Mark Gibbs

    Yea!! the evil company gets what it needs .

  • Sam Clark

    Google bought a modified Linux kernal called Android. Fatal error that will collapse this company. No company can ever profit long-term from Open Source IP. No one has proven that you can monetize open source over the long-term. Android will morph into a net loser for Google. Their search share will gradually shrink and their business model will collapse.
    While Microsoft took it’s PC OS monoply into servers, Office tools and other proprietary technology.
    The irony is that Google is the classic monopoly that could not innovate further into new businesses and Microsoft was the unique monopoly that did.

  • Jeff Rodenburg

    It was 7 years ago this month that Google filed for IPO, where they proudly defined how they would operate in the context of a public company. Essentially, long-term plans would rein over short-term results.

    As long as they kept blowing by earnings expectations quarter after quarter, year after year, the share price stormed ahead. Then, the first time earnings are substantially upside down to expectations, investors turn on the stock. Subsequently, investors start asking questions about expenses — with the implication that they should be questioned.

    It will be interesting to see where things go from here. I love engineering-run companies, but Larry Page has his work cut out for him as CEO.

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