This week Google officially unveiled its newest smartphone, the Nexus 6. Competing with the other phablets currently on the market, it has a six-inch screen and was made by Motorola. The Nexus 6 will go on sale beginning in November and will be available through AT&T, Verizon, Sprint, T-Mobile and US Cellular.

The Nexus 6 was introduced to us one day before Google was ready to release its third quarter earnings results for 2014. Google seems to have been hard at work lately; in addition to the new smartphone, it also just released a new TV gadget, as well as its new tablet the Nexus 9. Actually, Google has been working on a lot of things this year, such as drones, using blimps for wireless connections and joining forces with Barnes and Noble to compete with Amazon.

The third quarter results are now officially out and it seems that Google came up a little short, as its stock closed with a 3 percent loss. The analysts were predicting earnings per share (EPS) estimates of $6.53, but Google’s Non-GAAP (generally accepted accounting principles) EPS was $6.35. Traffic acquisition costs (TAC), which is the portion of revenues shared with Google's partners, increased to $3.35 billion in the third quarter of 2014, compared to $2.97 billion in last year’s third quarter.

Google revenues for this year’s third quarter were $16.52 billion, which translates to a 20 percent increase over third quarter 2013 revenues which were $13.75 billion. The breakdown represents $11.25 billion generated by site revenue, $3.43 billion from network revenue and $1.84 billion listed as other. Each of these areas all had an increase as compared to third quarter 2013.

One area that investors were focused on this year is paid clicks and cost per click (CPC). CPC is an Internet advertising model used to direct traffic to websites, in which advertisers pay the publisher. Estimates were for a 22 percent increase year-over-year however, paid clicks rose by 17 percent. On the other hand, CPC was expected to drop this quarter, which it did by 2 percent.

Some of the other highlights for Google’s third quarter earnings report include:

• Other Cost of Revenues - Other cost of revenues, which is comprised primarily of data centers operational expenses, hardware inventory costs, amortization and impairment of acquisition-related intangible assets and content acquisition costs, increased to $3.35 billion, or 20 percent of revenues.
• Operating Expenses - Operating expenses, other than cost of revenues, were $6.10 billion in the third quarter of 2014, or 37 percent of revenues. 
• Operating Income - GAAP operating income in the third quarter of 2014 was $3.72 billion, or 23 percent of revenues. This compares to GAAP operating income of $3.76 billion, or 27 percent of revenues. Non-GAAP operating income was $5.36 billion, or 32 percent of revenues.
• Interest and Other Income - Interest and other income, net, was $133 million in the third quarter of 2014.  
• Net Income - GAAP consolidated net income was $2.81 billion. Non-GAAP consolidated net income was $4.37 billion. GAAP EPS was $4.09 on 688 million diluted shares outstanding. Non-GAAP EPS was $6.35.

Revenue from outside the U.S. totaled $9.55 billion, which represents 58 percent of total revenues in the third quarter 2014. Of this total, $1.63 billion, or 10 percent came from the United Kingdom. According to Google, if foreign exchange rates had remained constant from the second quarter of 2014 through the third quarter revenues in the third quarter of 2014 would have been $66 million higher.

Google’s third quarter ended on Sept. 30. At that time, its cash, cash equivalents and marketable securities were $62.16 billion. This figure excludes cash classified as held for sale, which compares to $58.72 billion as of Dec. 31, 2013.