Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Google Stock Price Slumps But Outlook Still Bright

Companies / Google Jul 22, 2013 - 11:01 AM GMT

By: Money_Morning


Diane Alter writes: Google Inc. (Nasdaq; GOOG) stock plunged after its earnings report missed estimates.

Thursday after the close, Google's posted Q2 profit of $9.71 billion, or $9.54 a share, up 19% from $8.54 billion, or $8.42 a share, in the same quarter a year earlier. Revenue rose to $11.1 billion from $9.61 billion.

Those numbers came in below the consensus estimates of $10.80 EPS on revenue $14.45 billion. And, the surprising miss spooked investors in Google stock. Shares tumbled 5% in afterhours trading and another 3.38% in early morning trading Friday.

Google still views the explosive shift to smartphones and tablets as a lucrative opportunity for Google stock investors and the company. But, the Internet search giant's second quarter results serve as a stark reminder of just how financially challenging the early stages of that opportunity can be - even with an $11 billion-plus quarter.

In recent days, there was plenty of chatter about Google shares breaking through the $1,000 price barrier, a milestone that now looks a ways off amid the earnings miss.

Breaking Down Google Earnings

The following contributed to the lukewarm Google earnings.

Falling Ad Rates: Google's average ad rate fell from the previous year for the seventh straight quarter. Moreover, in an unexpected turn, the decline deepened for the first time in a year. The average ad rate, or cost per click, dipped 6% in the April-June quarter. That was especially disappointing given the size of the declines has waned in each of the previous quarters, raising hopes that the worst was over. However, things worsened from the 4% decline in ad rates during the first three months of 2013.

Ballooning Operating Expenses: Also bothersome was the 27% increase, to $4.25 billion, in Google's operating expenses. That jump fueled concerns that Google is spending too much money on far-reaching projects, such as driverless cars and balloons equipped with Internet beaming antennas, instead of maintaining a focus on its core business of Internet search and advertising.

Motorola Mobility: Google bought ailing cellphone maker Motorola Mobility 14 months ago for $12.4 billion, and the acquisition is proving expensive. The subsidiary lost $342 million in the latest quarter, up from $199 million. Since under Google's ownership, Motorola has lost a whopping $1.7 billion, despite accelerated efforts to stop the bleeding through layoffs and divestures. CEO Larry Page wouldn't predict when Motorola might start making money, but he did say on the conference call he was enthusiastic about the upcoming release of the new smartphone dubbed Moto X.

A number of analysts trimmed their price targets on Google stock by as much as $40 (with the lowest being $860) to factor in a drop in margins as the company pours money into pioneering businesses.

But brokerages such as Piper Jaffray, JMP Securities and Canaccord Genuity boosted their price targets, citing these developments that will boost Google stock in the long run...

The Good News for Google (Nasdaq: GOOG) Stock

Piper Jaffray, citing a change Google implemented this year that allows advertisers running campaigns on its Website to simultaneously run them on PCs and mobile, said the new system will increase ad revenue in the longer run.

"Enhanced Campaigns is the biggest change in the Google ad platform to date and thus it will likely take 6-12 months for the positive impact to show in the numbers," Piper Jaffray wrote.

Money Morning tech specialist Michael A. Robinson has called Google "the only tech stock you need."

His long-term view of the stock is bullish because of its red-hot product pipeline, with rollouts in the following new fields:

  • Augmented human intelligence
  • Wearable computers
  • Robotic cars
  • Machine learning and communication
  • Advanced optical networking

"The founders of Google are nothing if not visionary leaders with solid business chops," said Robinson. "They want to move far beyond search results and advertising and Android and tablets and operating systems and social networks to become the company of the future."

CEO Larry Page remains positively excited and upbeat about Google's future.

"The shift from one screen to multiple screens and mobility creates tremendous opportunity for Google. With more devices, more information, and more activity online than ever, the potential to improve people's lives is even more immense," he said in a press release.

As has always been the case, Google did not give forward guidance to Wall Street.

That, coupled with Google's undeniable volatile price swings, is part of the price (good and bad) of owning shares in the cutting-edge company which has handsomely rewarded shareholders over the long-term, and should continue to do so.

For Robinson's full analysis of Google (Nasdaq: GOOG) stock, go here.

Source :

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in