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.
Can Google Earnings (Nasdaq: GOOG) Push Stock to $1,000 a Share?
Google earnings for the second quarter come out after the bell today - with most analysts expecting a strong quarter.
Google Inc. (Nasdaq: GOOG) is expected to report Q2 earnings of $10.78 per share on revenue of $14.45 billion. That compares with a $10.12 EPS profit on revenue of $9.61 billion in the same quarter a year ago, according to analysts polled by Reuters.
In fact, Money Morning tech specialist Michael A. Robinson told Money Morning members on July 9 how Google stock is poised to gain roughly 50% by the end of 2015, after a stellar two-year run of 70% gains.
Monday, GOOG hit a high of $928. Shares are up 30% year-to-date, compared to the Standard & Poor's 500 Index gain of about 18%. Giddy investors are hoping Q2 numbers will be great enough to propel the stock over the $1,000 per share threshold.
However, even if investors don't get $1,000 a share, they just might get a stock split. Earlier this year, the Mountain View, CA-based company reached a legal settlement allowing it to split its stock for the first time ever.
A Surprise in Google Earnings?
While the Wall Street consensus is for Google to show a 4% decline in cost-per-clicks, in line with historical charts that show seven consecutive quarters of decreasing click prices, that figure is likely to come in higher-much higher.
Looking for Google to post better-than-expected numbers in this crucial segment are two "in-the-know" firms: The Search Agency, the largest independent paid search company in the U.S., and Adobe's digital marketing division, reports Venture Beat.
For the first time in two years, costs per click at Google are going up, not down, data from the two sources reveal.
Figures from The Search Agency show an 8.3% year-over-year increase and whopping 21.2 jump quarter-over-quarter. Adobe's numbers are a bit more modest with a 6% increase in the last quarter and a projected 5%-10% increase for the current quarter.
But the trend is the same - up.
Three Things to Look for in Google Earnings
With all the positivity surrounding Google, it's easy to overlook the details. Following are three things that will impact Google's present and future bottom-line.
This Hiring Coup Could Jump-Start Google's Stock
Futurist Ray Kurzweil is one of the world's busiest people.
And that's no surprise. A best-selling author and subject of a major documentary, Kurzweil has an unmatched talent for explaining how cutting-edge technology is going to change our lives.
That means this "A-list" speaker is always on the go, traveling the globe as he spreads his futurist technology gospel.
That's why I made sure to buttonhole Kurzweil at the recent Singularity Summit technology conference. As he headed into the San Francisco lecture hall to share the newest insights into how the brain works, I was able to walk along with him and have a quick chat.
As we talked, little did I know that Kurzweil was working on something that would stun the tech world in a manner that's usually reserved for one of his predictions.
No, I'm not talking about the buzz that's been generated by his new book, How to Create a Mind, the Secret of Human Thought Revealed.
Kurzweil, as it turned out, had accepted a major position at none other than Google Inc. (Nasdaq: GOOG), the Web giant that is to search what the tech futurist is to prognostication.
And Monday was Kurzweil's first day on the job as the company's new Director of Engineering.
A lot of investors have glossed over this news. That's a big mistake. As I see it, this single hire speaks volumes about how Google views itself, and how it intends to keep building shareholder value.
If you're interested in Google, this is a bit of strategic intelligence that you absolutely have to know.
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Can Google's (Nasdaq: GOOG) Nexus Dethrone the Apple iPad?
When Google Inc. (Nasdaq: GOOG) launched its new line of Nexus tablets a couple weeks ago, it was a shot across the bow of Apple Inc.'s (Nasdaq: AAPL) dominant iPad.
Even though Hurricane Sandy forced Google to cancelan event planned to show off the new gadgets, it went ahead and launched its new products anyway.
The timing was no coincidence.
Google's latest salvo came less than a week after Apple introduced a smaller, less expensive iPad Mini with a 7.9-inch display to compete against the Nexus 7 tablet.
It's no wonder these guys are at war. Tablet sales are expected to hit $29.1 billion this year, according to the Consumer Electronics Association.
That number is $10 billion higher than projected in January, escalating the battle to a whole new level.
Clearly both companies are feeling the heat.
And even though Apple is the clear leader in market share, Google has rolled out cheaper devices that are attracting many users-especially price-conscious ones.
The question is: Do Google's Android-powered devices have enough firepower to crack Apple's grip on the tablet market?
It's still too early to tell, but there's good reason to believe the Internet search giant may just pull it off.
Here's a look at what the new tablets have under the hood.
Google Glasses Prove the Future is Already Here
Getting a truly modern outlook requires a little help.
Fortunately, you may soon be able to buy a unique pair of eyeglasses that do the job for you.
In early April, Google Inc. (Nasdaq: GOOG) unveiled a stylish pair of Web-connected spectacles that serve as a computer you wear on your face (or perhaps a smartphone for your eyes).
They are called "Google Glasses" and they are a great twist on the "heads up" displays used by U.S. defense forces.
Most of us have never seen anything quite like this before - except in sci-fi films. But this high-tech, mostly hands-free device could change the way you live your daily life.
Put these eyeglasses on, and you have instant access your email. You can check the weather, get traffic updates, display maps and walking directions on the go, take photos, send texts, schedule meetings, listen to music, and make wireless video calls.
And get this. Google Glasses function by moving your head - nodding, for one - or by clicking a small button.
This is the kind of breakthrough I have in mind when I say we are living in the Era of Radical Change. The next two decades will be like nothing we have seen before.
And it all started right here in the good ol' USA.
Since the transistor was invented at Bell Labs in New Providence, NJ, back in 1947, the U.S. has vaulted ahead of the rest of the world at every major high-tech milestone.
In fact, as I like to remind readers, a simple law explains this steady stream of innovations we have enjoyed for decades. Named for a Silicon Valley genius, Moore's Law states that computing power doubles about every two years.
Look at it this way...
In the 1960s, for the first time people started using basic electronic calculators to perform addition and multiplication functions.
Today - just 50 years later - they can sport Google Glasses that make video phone calls. (Now you'll believe me when I say what's next... I believe that in the very near future we will be able to upgrade our IQs with devices implanted inside our brains.)
Thus, Google Glasses are so much more than just the latest cool gadget. They give us a great insight into what the near future holds.
It's going to be a thrilling ride.
Google Glasses and the Era of Radical ChangeAccording to early reports, Google could hit the market with these glasses by the end of 2012. But let me be blunt about one thing. Cynics have blasted Google over this project. They note that the Web giant has made no promise it will ever release the glasses.
That's true. But it misses the big-picture view.
Even if Google shelves its "Project Glass," I predict that someone else will quickly step in to fill the void. And that option could turn out to be the better bet for investors.
After all, with its $200 billion market cap Google is such a big company that these glasses, as cool as they are, may not move the stock's price all that much.
Either way, however, we win.
If Google Glasses do hit the market in time for the holiday, then we can all go out and grab a pair. If not, then we can look for a small-cap leader that's gearing up to bring them (or something similar) to market and then invest in that company.
In that case, what we hope for as tech investors is a firm like InvenSense Inc. (NYSE: INVN).
This is a small-cap leader that makes motion sensors used in a wide range of electronics, including smartphones equipped with Google's Android operating system.
Even after a huge recent sell off, the stock has returned more than 35% so far this year. Compared with Google's year-to-date loss of about 6%, InvenSense is on fire.
As it turns out, there are two small companies on my radar screen with products in the same space as Google's glasses.
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Tech Stocks: The Deal with the Google Stock Split (NASDAQ: GOOG)
Google Inc. (NASDAQ: GOOG) reported first-quarter earnings after the close yesterday (Thursday) and the Internet search giant did not disappoint - and also delivered a surprising stock split announcement.
First quarter profits at the Mountain View, CA-based company soared 61% to $2.89 billion, or $8.75 a share, up from $1.8 billion or $5.51 a share a year ago. Excluding stock-based compensation, profit rose to $10.08 from $8.08 a share. Total revenue was up 24% to roughly $8.14 billion.
Analysts had anticipated earnings of $9.65 a share and revenue of $8.15 billion, according to Thomas Reuters.
While the numbers were a little light, the company appeased investors with an upbeat outlook going forward.
Google also made an unexpected move: a two-for-one stock split.
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Tech Stocks: Will Google Inc. (NASDAQ: GOOG) Wow Investors Today with Earnings?
Investors have a lot to look for when Google Inc. (NASDAQ: GOOG) reports earnings after the bell today (Thursday). The company needs to prove it has plans to stay in the lead among tech companies - and fight off the encroaching threat of social media giant Facebook Inc.
Investors are hoping Google avoids a repeat of last quarter's report.
Mountain View, CA-based Google reported a rare earnings miss in January, sending the stock tumbling some 8%. Google's stock price has rebounded since, recouping nearly all of the loss, and currently sits just 5.5% below its 52-week high.
Analysts expect first quarter sales to rise nearly 25%, and that earnings per share will rise 20% to $9.65, CNN Money reports. For the full year, industry gurus forecast growth of 22% and a pleasing 18% profit increase.
A lot is riding on Google's first-quarter earnings results, not just for the company, but also for the overall market. Gangs of Google fans hope the favored company will follow bellwether Alcoa Inc.'s (NYSE: AA) lead and report better-than-expected numbers.
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Android@Home, Project X, and Other Secrets of Google Inc. (Nasdaq: GOOG)
Lately, Google Inc.'s (Nasdaq: GOOG) Mountain View, CA-based headquarters have looked more like the clandestine lair of a Bond villain than a business center.
The company has poured more than $120 million dollars into construction projects that are fit to house testing labs and top-secret initiatives with names like "Project X."
One theory about what's going on at the Googleplex involves the development of a driverless car.
And that may well be true - but the more immediate and practical use for the renovation would be to expand the base from which the company competes with rival Apple Inc. (Nasdaq: AAPL).
Google's war with Apple continues to escalate as the two companies fight for ground in three major consumer markets: mobile devices, Internet search and digital media.
Google fired its first salvo at Apple with the introduction of its Android operating system, which has come to dominate the smartphone market.
Apple recently retaliated by introducing Siri - the voice-activated search engine that has been a major selling point for the latest iPhone.
Still, the biggest clash is set to take place in your living room.
Google and Apple are fighting to be the company that supplies your media at home, stores it for you in a cloud drive, and then distributes it to your wireless devices.
Google has even expressed interest in bringing other appliances into the fold, connecting things like lighting, heating, and air conditioning via the Android operating system - a seamless integration dubbed "Android@Home."
The goal is to let you control every electronic device in your home through a smartphone or tablet.
This is a battle for what futurists call the "digital living room."
And it's just getting started. Here's a sneak peak at what's in store.
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