Robert DeFrancesco’s
TechStockProspector.com
January 19, 2012
Google (GOOG) Shares Dive on Q4 Disappointment
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Google (GOOG, $582 after hours) shares were slammed after hours, falling more
than 57 points (a 9% loss) following a Q4 miss on both the top and bottom lines.
EPS of $9.50 fell short of the consensus by 99 cents, while revenue of $8.13 billion
(+27.6% year over year) missed the consensus of $8.41 billion. Europe is part of the
problem, with a slowdown evident outside of the UK, especially in Germany. Google
generates about 53% of its revenue from outside the U.S. The bottom line was under
attack from increased operating expenses, which represented 32% of total revenue,
up from 30% in the year-ago quarter.
Expectations were high going into this report, so the sell-off is not that surprising.
The magnitude of the after-hours decline is interesting. But keep in mind that
Google does not provide quarterly guidance, which ratchets up the volatility. Quick-
trigger traders like to play this name over the short term.
Here are some of the key metrics from the earnings conference call:
*Google+ now has 90 million users (more than 60% engage daily & 80% weekly)
*Paid clicks +34% year/year and cost per click down 8% y/y
*250 million Android devices now active
*Display business reached a $5-billion annualized run rate (includes YouTube)
*Cash & investments total $44.6 billion
For more on the tech sector, see the January 2012 issue of Tech-Stock Prospector,
which is now available at TechStockProspector.com (subscription required) and in
the Amazon.com Kindle store.
We offer 30-day trial subscriptions, including daily Web updates, for just $47.
Here are some of the topics covered in the January 2012 issue:
*Hot tech trends for 2012
*4 cloud software buyout targets
*A winning play in storage
*Benefiting from the 4G upgrade cycle
*Google valuation analysis update
*Akamai investors applaud the Cotendo purchase
*Tibco Software tops expectations
*Red Hat expands its reach
*Buy Zynga on the dip?
*Acme Packet hits an air pocket
*Battleground stock for 2012: Salesforce.com
*Money Manager Focus: Seeing value in SGI
*How Ariba drives B2B commerce
*IPO Focus: Jive Software
*TSP Deal Report: A look at privately held Splunk
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TechStockProspector.com
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Tech-Stock Prospector is now available in the Amazon.com Kindle Store in the
Business & Investing section of the online magazine stand.
Here’s the Kindle link: http://www.amzn.com/B004T6Z0ME
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Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20
years of experience covering the tech sector. He is a former senior writer with
Louis Rukeyser’s Wall Street.
TechStockProspector.com, launched in 2003, is an investment-research service
focused primarily on the networking, storage, security, wireless and software
sectors. Annual subscription: $350.
For more information or to place an order, call 800-392-0998.