Research archive for GOOG

Perhaps the biggest corporate news of the day, no, let me rephrase, the most exciting corporate news of the day was the unveiling of the Nexus 7 tablet by Google. And at the same time two other pieces of hardware designed by Google, which must be making the old hardware producers quake in their boots. There is something called a Nexus Q, which is a home entertainment system of sorts and then perhaps the most out there product, Google Glass, you must have seen the prototype in previous messages. The glasses with an embedded computer display, which enables you to find stuff on the fly, and do all the wonderful things that tech geeks would want. Google added around four fifths of a percent, Mr. Market liked the news clearly.

And then earnings after the bell from Google inc. This is a company with a market capitalisation of 211 billion Dollars, incorporated in September 1998. So, if Google were a person, they would not be able to get a drivers licence or enter into any legal agreements without consent of their parents/guardians. There is to be a stock split and the control aspect by the founders (Larry and Sergey) and major shareholders leads me to believe that they think they are the parents. Which means that the shareholders are the kids right?

A whole host of results yesterday, but after hours there were results from Google inc. for the fourth quarter, and both the top and bottom line missed expectations. Which is not good, but there were some factors, some unavoidable. A stronger US Dollar eroded international sales, there was a fall off in ad click prices, but perhaps more importantly costs continued to rise and are now nearly one third of all revenue. Check out the press release: Google Announces Fourth Quarter and Fiscal Year 2011 Results where the opening line kind of detracts from where the share price is trading in the extended market, commentary from Larry Page:

Google reported numbers post the market close and seemingly the aftermarket is telling you that they have been well received. Currently in the extended trade part of the market, Google are up 6.37 percent to 594.6 Dollars a share. Year to date they are lower by 5.89 percent, this gain in the aftermarket would put them slightly higher on the year. Yip, it has been a tough old year. Although Google+ is up to 40 million users (I am one) how many people actually use the service actively yet? Does not matter for now, it will come, I remember the same sort of start up phase with Facebook. Sales climbed 33 percent when measured against the corresponding quarter last year, up to 9.72 billion Dollars. Revenue from outside of the US climbed to 55 percent of the groups total revenue, pleasing the company no doubt!!

Big M&A news coming out yesterday from one of our recommended stocks in New York. We had Google announcing a massive $12.5bn deal to buy Motorola's cellphone business. A deal that has picked up a lot of criticism. It is the biggest acquisition in Google's history and throws them into the extremely competitive world of smartphone and tablet hardware manufacture.

Google jumped nearly 13 percent on Friday, the share price that is. Year to date Google is flat, up a fraction really. Amazing. And 150 USD above their 52 week low, around 45 Dollars (less than 8 percent) below their 52 week low. Mean estimates are for somewhere in the region of 34 Dollars worth of earnings and in the next fiscal nearly 40 Dollars worth of earnings. So what do you pay for a company that has grown so quickly? That has proven that they can diversify (and quite quickly at that). Let me put it this way, I would rather be owning Google than some stretched valuation on a new listing of a relatively young business. Still, Google might seem expensive on 21 times earnings. But less so forward, 15 times 2012 earnings. No dividend. That US tax rate needs to be addressed by the law makers. But seemingly those same folks cant put their underpants on correctly.

Firstly we had Google smashing expectations with their Q2 earnings numbers. Net revenue was at $6.92bn (up 32% from last year) vs consensus of $6.75bn. The big question was profits however as investors were worried about the increasing costs that Google were incurring after making some big investments in staff and capital. EPS came in at $8.64 vs consensus of $7.68. Annualise that and we get $34.56 and a PE of 15 assuming no growth from this quarter (I'd say that is highly unlikely). Like I mentioned earlier the stock is trading up 12.6% after hours so we should be expecting an open in the region of $595. How the analysts were wrong.

One of my favourite companies in the whole wide world, Google, released results last night. Revenue for the first quarter was up 29% yoy (3% qoq) to USD6.5bn which was generally in line with estimates. EBITDA came in at USD3.6bn (wow those are great margins of 55.5%) but was slightly less than what highly expectant market participants were hoping for. This equated to USD8.33 dollars a share for the Quarter.

Newspaper advertising revenue. You would expect the trend to show that it is getting worse and not better, but Byron shows that it is a little more alarming than you think. Like we say in the office, this notion that newspapers are dead is nonsense, those fast enough are just changing their model.

Google were slammed last night, part the below story about Groupon and part a pending fine of sorts, Apple also had a bad time, perhaps the competition gathering momentum. BUT, the iPad version 2 is going to be released with wow features before some guys have even got version 1 to market. And Walt Mossberg, a well respected journalist at the WSJ who thinks these things through well, suggested that the only tablet he thought could compete with the iPad would be the Samsung Galaxy. So, sorry RIM. Phew, I guess for those types, RIM and HP and even Microsoft and all the androids, they would hope he is wrong.

Google "knows" where you are. And what you are up to. Is that such a bad thing? So what if they know about my web search activities? I have still yet to see a compelling Google advert that I must just click on NOW. The more search engines pick up and the more they are able to help me, I should be so happy, not so? Or have I got it completely wrong here, are Google going to sell my information to the Russian government who are going to send me to the Mongolian desert where there is zero market, news and zero sport coverage, because I do too much of that? Gimme a break. Your bank has all of your information, OK.

Afterhours was actually where the action was at. In the form of my favourite search engine, Google. I do also use Safari, but I associate almost all searches with Google, even if this is not the case. Third quarter profits when measured against last year surged 32 percent to 2.17 billion Dollars. Call it 6.72 a share worth of earnings, annualise that (matchbox on the fly valuations) and you get to around 27 bucks. 588 bucks pre market, up 47 Dollars a share post the close. That is nearly nine percent, yowsers. But that is an earnings multiple in of around 25 times earnings. Next year the expectations are for the company to earn in the region of 31.33 bucks a share. So even close to 600 bucks less than 20 times forward earnings.

A little pressure coming through on futures this morning and overnight as Google missed the "whisper number". Check out this article that I found while I was Googling. Google Misses Some Estimates as Costs Rise to Tap New Markets. Oh, and FYI, Facebook has more searches than Google. Down nearly five percent in after hours trade.