Google - The Party Is Over


News Reports are just coming in of Googles 4th quarter results. They were timed, in advance, to be announced after hours today. This story is developing fast. Some reports are saying G stock trading has been temporarily suspended.

1. Earnings in line with expectations $1.29 billion, but needed to be higher to "impress"
2. Earnings per share, of $1.54 a share, well below analysts' consensus estimates of $1.76 a share.
3. Share price falls 20% in after hours dealings.
4. Basically they are good figures, but do not match the (inflated) expections of the market, and the share price of around $440.

And since Google does not provide earnings guidance, it seems likely that analysts will now lower their first quarter and full-year 2006 forecasts. That could put further pressure on the stock. Analysts currently expect Google to report sales of $1.46 billion and earnings per share of $2 for the first quarter and revenue of $6.56 billion and a profit of $8.79 a share for all of 2006.


P/E ratios need to be 14,

P/E ratios need to be 14, 24, hell even 44 would look good.



We discussed this 11 days ago - IMHO a 20% drop is not much as GOOG is still way overpriced by any measure.


>> GOOG is still way

>> GOOG is still way overpriced

true, but as those who shorted internet stocks during the bubble can attest, the market can stay irrational longer than you can stay solvent.

After Hours

After hours quote on eTrade shows trading in the $380 range.

Is it time

Is it time to sell short?

Profits Nearly Double

Google profits nearly double. They missed analyst's predictions...and I do mean predictions.

The party is not's just getting started.

P.S. Nothing is over or undervalued in the stock market. Everything sells for what it's worth (i.e. market value).

Definitely Overvalued...

Google is quickly moving out of the high-return market into lower ROI markets. They have successfully monetized their existing brands and now they are in the process of developing new ones, such as Google Video. They can piggy back on their brand, but text ads and a good search engine algorithm will only get you so far these days.

UK bit of G profits

Interesting little snippet on Reuters report . G is particularly strong in UK, so perhaps they have nowhere to go but down.

Google said on a conference call to discuss its results that the higher tax rate stemmed from strong results in the United States and somewhat weaker growth in Europe, particularly in Britain.

also the UK and overseas

also the UK and overseas income were hit by higher US dollar value than in recent quarters, due largely to the fed raising interest rates.

If profits are a problem,

If profits are a problem, they could always cut the percentage paid out to publishers for Adsense. How would WMs even know if their percentage dropped say 18%? What would an 18% cut in ad revenue share do to the bottom line?

And then came China.
>The party is not's just getting started.<

I have a feeling he's right. A dip will cause little more than a small ripple in a company with more cash than most third world countries.

I think Google has the brains, the programming,the marketing and the cash to grow into something the human race has never before imagined possible, and on a global scale. There is always a chance they could blow it or that Microsoft will hire someone under 50 to do their marketing or at least get some people smarter than Bill Gates used to be,(if they are going to do this, they better do it pretty soon), but assuming they don't do something really stupid, they could become a lot more than a search engine or even a huge company.

Ever heard the term, information is power? Well how many government officials do you think have ever been to google and searched for porn? Now the government is wanting them to turn over the records and G is refusing. Why? Because they are smart. You don't show your hold cards until the other guy calls.

So what kind of power is there in knowing what virtually every public official, (could easily replace public official with human being), in the world searches for, surfs to or buys online? Who among us has no skeletons in our virtual closet? Damn right there is power in information and the stock market may be about money, but Google is about power. The money is incidental.

But I'm an old fart and know little of the ways of big money.

Looks like Eric

was doing some forward thinking.

Eric wasn't the only one

Someone did a bit of research

In total, Mr Schmidt netted well over $15 million. This figure is dwarfed by sales made by Lawrence Page on the 20th of January. Mr Page made two sales of 43,795 and 51,727 shares which yielded $18,052,632 and $22,166,198 respectively.

Still a chap need a few dollars to buy the groceries every month

They have been selling

They have been selling shares the whole way up. I wouldn't expect them to stop selling unless they felt the shares were drastically under priced.

se stocks still adjusting as

se stocks still adjusting as of market close today

Dow (-0.54%)
Nasdaq (-0.83%)
S&P 500 (-0.54%)
GOOG (-3.66%)
YHOO (-2.07%)

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.