5 ms·

Profit measured in dollars, with revenue coming in across the world means part of this isn't real growth.

brl 19y ago
Good point.
Xichekolas 19y ago
The profit is up 46% year over year... The Euro has risen about 18% against the dollar in the same period. Even assuming that ALL of their business was in Euros (which it isn't by far), this still represents pretty darn good growth for a company that already had the market cornered.
- ivankirigin 19y ago
  They've certainly grown. IIRC, I've read that around 50% of Google's revenue if from outside the US.
- nostrademons 19y ago
  Profit is more heavily leveraged than revenue. Let's do a hypothetical example. Assume that you've got a company that does $100M in revenue, 30% of which comes from Europe (so $70M from US, $30M from Europe). They spend $90M to get that revenue, all in USD, for margins of 10% and earnings of $10M. Now say that the Euro appreciates 20% against the dollar. That $30M in Euros becomes worth $36M. Total revenue goes up to $106M, but expenses stay constant at $90M. Profit is up to $16M, a 60% increase. However, the operation of the business hasn't changed at all - it's all due to currency fluctuations.
  - byrneseyeview 19y ago
    But revenues are up 57% year-over-year. So if forex played a part, it had to be negative -- if they have disproportionate oversease expenditures compared to revenues, that would make sense. Otherwise, blaming the dollar doesn't help.
    - Xichekolas 19y ago
      Well I'm sure that forex had a slight positive effect. My point was that it wasn't the only cause of the increased profits. The fact that revenues are up 57% and profit is only up 46% with the slight forex leverage probably signals that they are getting big enough that their margins are falling off. I would guess that is why it is only up 1.2% (as of close of market) on such a huge increase. The other reason probably has to do with the generally bad day on the market today. Of course, seeing it around $650 makes me wish I hadn't sold all mine at $425. ;)
  - Xichekolas 19y ago
    From the actual filing with the SEC: "International Revenues - Revenues from outside of the United States totaled $2.03 billion, representing 48% of total revenues in the third quarter of 2007, [...] Had foreign exchange rates remained constant from the third quarter of 2006 through the third quarter of 2007, our revenues in the third quarter of 2007 would have been $121 million lower." Additionally, their total reported profit (net income is the figure that increased 46%, so I will assume that is what they mean by 'profit') was $1.07B. If you assume that the $121M due to forex was pure gravy, then their pre-forex profit was $949M. This is still a 29.5% increase on a year earlier (when their profit was $733M in the third quarter).
- mwerty 19y ago
  This need probably applies to other companies. We'd probably need a usd/non-usd revenue breakout in yahoo finance or its competitors.

brl 19y ago

Good point.

The profit is up 46% year over year... The Euro has risen about 18% against the dollar in the same period. Even assuming that ALL of their business was in Euros (which it isn't by far), this still represents pretty darn good growth for a company that already had the market cornered.

ivankirigin 19y ago
They've certainly grown. IIRC, I've read that around 50% of Google's revenue if from outside the US.
nostrademons 19y ago
Profit is more heavily leveraged than revenue. Let's do a hypothetical example. Assume that you've got a company that does $100M in revenue, 30% of which comes from Europe (so $70M from US, $30M from Europe). They spend $90M to get that revenue, all in USD, for margins of 10% and earnings of $10M. Now say that the Euro appreciates 20% against the dollar. That $30M in Euros becomes worth $36M. Total revenue goes up to $106M, but expenses stay constant at $90M. Profit is up to $16M, a 60% increase. However, the operation of the business hasn't changed at all - it's all due to currency fluctuations.
- byrneseyeview 19y ago
  But revenues are up 57% year-over-year. So if forex played a part, it had to be negative -- if they have disproportionate oversease expenditures compared to revenues, that would make sense. Otherwise, blaming the dollar doesn't help.
  - Xichekolas 19y ago
    Well I'm sure that forex had a slight positive effect. My point was that it wasn't the only cause of the increased profits. The fact that revenues are up 57% and profit is only up 46% with the slight forex leverage probably signals that they are getting big enough that their margins are falling off. I would guess that is why it is only up 1.2% (as of close of market) on such a huge increase. The other reason probably has to do with the generally bad day on the market today. Of course, seeing it around $650 makes me wish I hadn't sold all mine at $425. ;)
- Xichekolas 19y ago
  From the actual filing with the SEC: "International Revenues - Revenues from outside of the United States totaled $2.03 billion, representing 48% of total revenues in the third quarter of 2007, [...] Had foreign exchange rates remained constant from the third quarter of 2006 through the third quarter of 2007, our revenues in the third quarter of 2007 would have been $121 million lower." Additionally, their total reported profit (net income is the figure that increased 46%, so I will assume that is what they mean by 'profit') was $1.07B. If you assume that the $121M due to forex was pure gravy, then their pre-forex profit was $949M. This is still a 29.5% increase on a year earlier (when their profit was $733M in the third quarter).
mwerty 19y ago
This need probably applies to other companies. We'd probably need a usd/non-usd revenue breakout in yahoo finance or its competitors.