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GOOG Sideways Going Into Earnings
Initial jobless claims fell more than expected last week and showed their biggest decline since February. That said, the market still opened down amidst worries that China’s rapid economic growth may lead to more aggressive measures to tackle inflation. Shares of GOOG are trading sideways and are mostly in the red as investors await earnings. Upcoming catalysts include fourth quarter financial results today at 4:30 p.m. ET; continued Android momentum in smartphones and tablets; strengthening its presence in China; updated software, adoption and media partners for Google TV; and progress in other newer initiatives (location-based services, mapping, gaming, etc.). The stock trades at approximately 16x Enterprise Value / EBIT, inexpensive relative to historical trading levels and the broader Internet group.Join Business Insider For LIVE Coverage Of Google’s Earnings (Business Insider)
Please join Matt Rosoff for live coverage of the conference call, financial analysis and commentary tonight at 4:30 p.m. ET at SAI.
Earnings Preview: Whisper Number Is $8.11 EPS On $6.04 Billion Of Revenue (TradersHuddle)
Wall Street Analysts consensus has crept up the last month. The Street is now looking for a profit of $8.06/share on $6.04 billion revenue. The high earnings estimate calls for profit of $8.42/share and the low is $7.75/share. The whisper number is $8.11/share. Last year the company reported $6.79/share.
Google Top Internet Pick For 2011, According To Deutsche Bank (MediaPost)
Deutsche Bank analysts believe Google is poised to “enjoy a much improved year in 2011 against fundamentals and the share price.” Display advertising should increase 13% in 2011, surrendering some growth to emerging ad categories like mobile, social and online video. U.S. consumer spending should increase by 8% in 2011, as a result from the push by offline retailers to aggressively market their products in online stores. Strong growth is also expected from local and group buying companies and acceptance of mobile commerce.
Daily Trader: The Google Bulls Are Back (Barron’s)
In the past month, nine analysts have increased earnings estimates on shares of Google, five of which were in the past week. Google’s consensus earnings-per-share estimate is $8.09, up from $8.04 a month ago, and sharply higher than the $7.51 anticipated three-months earlier. The stock is bouncing between $630 and $640 and is attracting strong bullish trading ahead of tonight’s earnings report. This could be a sign that Google is back in favour with the so-called smart-money crowd. Traders are chasing Google’s January $650 calls, indicating that they expect the stock to hit a new 52-week high.
ARM-Powered Google TV In The Works (ARMdevices)
Google is rumoured to confirm that an ARM-powered Google TV is in the works and will be released soon. It would certainly be great to see a sub-$100 ARM powered Google TV on the market to spread the platform to the masses. Apparently one of the main reasons why Google TV had been blocked by various networks was because of the Flash plug-in that is built into the units.
The EC All Over Google And The U.S. Regulator Could Follow (eWeek)
The European Commission (EC) is doing its due diligence in its investigation of Google’s search-engine practices with a questionnaire to advertisers asking whether Google manipulated search results to promote its own Web services. This is important because if the EC spanks Google for monkeying with search-engine results, the FTC and DOJ may feel increased pressure to do the same.
Google Killed The Arcade Star (VentureBeat)
Google is either going to go gaming solo or doesn’t know what the heck to do with the space. Kongregate released a mobile app that brought most of its flash games to devices running Google’s Android mobile operating system. But the application was pulled from the Android marketplace nearly immediately. The Kongregate Arcade was one way to bring the gaming company’s 13 million gamers to Android devices. Maybe Google Games is still in the works.
behavioural Targeting Ads Is Google’s Cash Cow (MediaPost)
Google never talks about it but the company does a darn good job of targeting ads based on behaviour. The search pillar is Google’s “cash cow” fueling revenue growth; the video and display pillar generate short-term revenue growth, while the mobile pillar provides long-term growth. In essence, Google has created a cyclical cash market strategy similar to Microsoft and other large corporations that have succeeded to sustain ups and downs throughout the year. The real challenge will come from social media.
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