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GOOG Earnings: After Market No Likey

By - January 31, 2006

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GOOG is not doing well after releasing earnings. AP is calling it an “earnings miss.”



Google reported adjusted earnings of $1.54 per share, well below Wall Street’s forecast for $1.76 per share, even though it brought in higher revenue than expected.

Google shares were halted for the early part of the aftermarket session, then dropped significantly when trading resumed. Shares were down $68.17, or 15.8 percent, trading at $364.49 on the INET electronic exchange, from their close on the Nasdaq at $432.66.

From Google’s release:

“We are very pleased with our results for the fourth quarter as we

achieved excellent performance across our businesses,” said Eric

Schmidt, CEO of Google. “We generated significant revenue growth in

our core search and advertising business, driven by continued strength

in traffic and monetization. We will continue to invest significantly

as we develop innovative new products and as we extend our core

technologies to new user access points and to different channels.”

Q4 Financial Summary

Google reported revenues of $1.919 billion for the quarter ended

December 31, 2005, an increase of 86% compared to the fourth quarter of

2004 and an increase of 22% compared to the third quarter of 2005.

Google reports its revenues, consistent with GAAP, on a gross basis

without deducting traffic acquisition costs, or TAC. In the fourth

quarter, TAC totaled $629 million, or 33% percent of advertising

revenues.

Huh. I am not a stock picker, but I guess the fellow from Yahoo is feeling pretty smart about now.

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10 thoughts on “GOOG Earnings: After Market No Likey

  1. TechTrader says:

    I am a stock picker and I was negative on GOOG’s earnings before the call. But NOW I’m positive on the business after the announcement. Why? Because Google didn’t miss due to any deficiency with their business. They hit revenue targets.
    They missed because everyone mis-estimated the tax rate!
    Nothing’s wrong with the fundamental business.
    Now, if they’d just stop acting like dot-commers and make sure they know that they’re now running a business, it would make me feel even better.

  2. Fritz says:

    Hello, Googel is stop the No. 1 at least in Europe nearly 70-75% market share, even if times the shares slip downward at short notice. With China Googel shows times again pointed to be made must. Other offerers would have missed already in former times the chance had however those to have it. beautiful greets from Austria and sorry for my bad English

    cu Fritz

  3. Tom says:

    Wall Street Misses Google Numbers Again

    That’s what the headline should be.

    This just goe to further show how little they know about a business like Google. They kept getting it wrong to the under…now they’ve got it wrong to over. I’m not surprised.

    The numbers on Google look great. This is coming ffrom someone who bought at $115 though and I’m sure those that bought north of $400 are stinging a bit.

    Tom

  4. Kendall Willets says:

    Revenuewise, Google now has as many ads on the results page as results. Maybe they should caption it “Ads 1-10 of about 3,000,000″.

  5. Philip Pearlman says:

    conocophillips had net income almost ten times that of goog this past q yet sports a market cap only 3/4 the size.

    what a joke..

    (oh yeah and cop pays you a quarterly dividend too.)

  6. Tom Olgin says:

    Clearly, Google saw early on in the quarter that UK sales were in a slump, and as the Yahoo fellow pointed out, tried to compensate with accelerator changes. I thought this type of wagging the wall Street dog’s tail was what Larry and Sergey explicitly stated they would not do in their prospectus. I will no longer be surprised if we see Google resorting to more such accelerators in 2006 as it tried to regain its Wall Street defying status.

  7. Joe Hunkins says:

    Amr nailed it. A great before-the-fact analysis.

  8. Nitin says:

    Hi John,
    Thanks for a very good site.
    I live in INdia and interested in Outsourcing. How can Google help me do a vertical search to find Outsource buyers as well as sellers?

  9. Nachos says:

    Here’s what happened – Wall Street realized that Google is an ad company, not a tech company. I read the comments here and at other blogs, and it sounds so much like what people used to say about apple, how they are innovating, that no one understands them, etc. What are you talking about? Everyone understands google, it’s just that the company that allowed itself to be touted in the press as the next microsoft is barely better than google? Is gmail attracting people away from yahoo mail? Not really. And google’s initiatives fall flat more often than they hit – RSS reader, google video, picasa, etc. Yahoo is the company with vision here, look at its deals with flickr and delicious.

    Yes, google is number 1 in search. Great. That’s a metric that doesn’t matter, like measuring eyeballs. Yahoo keeps users on its sites more than any other online service. That’s what matters.

    I wonder – if firefox had relied on yahoo search as it’s default homepage and search box rather than google, how big an impact would that have had?

    I’m not suggesting google will die, it will become just another player in the industry.

  10. @Nitin you can buy adwords

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