Google beats, stock climbs

Google reported numbers after hours. Here it is, the release as per their investor relations page: Google Inc. Announces Fourth Quarter and Fiscal Year 2012 Results. This time around there was no {insert Larry quote here}. Nor was the release early, this was not a disaster from a corporate relations point of view. Google cash and marketable securities for the year to end December 2012 added up to just over 48 billion Dollars. They could buy Dell two times over and have some cash left over, around 4 billion Dollars. Instead Microsoft is currently rumoured to be engaging Dell along with some private equity types. The original search engine for what is Google now (the website tells me it was originally called BackRub) was built by Larry and Sergey in 1996. The company was founded in 1998, by some amazing coincidence (luck?) they managed to miss the worst of the tech bubble crash. Listing was in August of 2004, the IPO went off worse than anticipated, they priced below 90 Dollars a share, 85 bucks in fact. I don't ever remember them trading at that level, even if you had paid 108 Dollars a share a few days later, your return would be 550 percent from late 2004. Major acquisitions included YouTube for 1.65 billion Dollars, or roughly 1.29 Dollars per view of PSY's Gangnam Style.


But, that is history, we are more concerned whether or not the company offers value at 737 Dollars a share. Well, Google advertising is basically the whole company for the time being. There are roughly 30 plus other businesses, including Motorola (which made a loss) that are still not yet major contributors to the business. Google Sites and Google Networks are 94 percent of revenues. "Other revenues" are a mere 6 percent of the total. Total fourth quarterly revenues increased 36 percent to 14.42 billion Dollars, and for the year topping 50 billion for the first time. So, in 16 years, from zero, here is a company that generates 50 billion Dollars of sales per annum. And who said that American ingenuity was gone?


For the year net income topped 10 billion Dollars, on a per share basis that equates to 32.31 Dollars. Free cash flow per quarter of 3.649 billion Dollars. Wow. The stock trades on a 22.8 multiple. No dividend as of yet. Margins are a little under pressure. Motorola looks like a bad dream, but then again people questioned YouTube. We continue to add to the stock at these levels.