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GOOG Down Ahead Of Earnings
The market was up in early trading as JP Morgan’s earnings release beat estimates to kick off earnings season. But stocks tumbled by midday on Bernanke’s comments that there are no plans for a third round of stimulus. Shares of GOOG are down about 1.3% ahead of tonight’s earnings report at 4:30 p.m. Eastern Time as analysts hedge the quarter (see below). Catalysts include news flow from tonight’s call; continued Android momentum in the smartphone and tablet markets; regaining ground in China; updated software, adoption and media partners for Google TV; the roll-out of Google Music; and progress in other newer initiatives (Google+, location-based services, mapping, gaming, Chromebooks, etc.). The stock trades at approximately 12x Enterprise Value / EBIT, inexpensive relative to peers and historical trading levels.
Join Business Insider For LIVE Commentary On Google Earnings (Silicon Alley Insider)
After the market close, join the SAI team for live commentary and analysis on Google’s second calendar quarter earnings results and conference call discussion.
Wall Street Weighs In On Google Earnings Before The Bell (Barron’s, Various)
- Collins Stewart analyst Mayuresh Masurekar thinks Google could miss estimates for the quarter. He’s modelling revenue of $6.51 billion with $7.44 per share, below consensus. Still, Masurekar has a Buy rating on shares of Google, and a $680 price target. He thinks despite a possible miss on numbers, now’s a good time to pick up the stock, as revenue should rise by 17+% the next two years.
- Colin Gillis with BGC Partners thinks that investors should “beware the June quarter,” as the company is placing investments in new initiatives ahead of revenue growth. He estimates $6.47 billion in revenue with $7.91 per share. As for the company’s new social networking initiative, Google+, he believes it does not make Google a growth stock.
While these analysts aren’t big names on The Street, consider yourself warned. Some more:
- Heather Bellini at Goldman Sachs believes is modelling net revenue and EPS of $6.58 billion and $7.71, respectively, versus consensus of $6.55 billion and $7.86. Her checks for the quarter coupled with a 200 basis-points quarter over quarter and 500 basis-points year-over-year of currency tailwind suggest slight upside to her forecast. That being said, there will not be material flow through to the bottom line.
- Jeetil Patel at Deutsche Bank believes that Google is positioned to deliver an in line quarter with revenue of $6.67 billion and EPS of $8.10, higher than consensus. Continued online ad strength, share gains in paid search, weakness in the U.S. dollar and continued ramp in display ads should result in revenue growth. He remains a buyer in light of the discount multiple to growth.
- Brian Pitz at UBS says that while core search fundamentals remain intact, he believes continued product innovation, improved ad formats and emerging businesses will drive solid top-line growth. Keys to the conference call will be expenses, cost-per-click metrics, emerging business traction (mobile, social, etc.) and CEO involvement on the call.
Google Rolling Out Photo Sharing Service (Mashable)
The Google’s photo sharing service, Photovine (formerly known as Slide), has sprouted a couple of new leaves; a teaser video for the social platform and a “request an Invite” button. The registration form currently accepts invite requests, and the confirmation email claims that Photovine will be “slowly rolling-out invites starting later this month.” Just in time for Google+ to hit another few tens of millions of members.
Combined Search Share Of Yahoo And Bing Is Still Less Than Half Of Google (comScore)
Bing’s market share remained flat in June, along with Google and everyone else. Bing now commands a whooping 14.4% of the search market, according to comScore. When combined with search partner Yahoo, that number jumps to 30.2%, still less than half of Google’s 65.5%.
Android Gets Another NFC Payment Option With PayPal (Various via techDygest)
EBay’s PayPal unit unveiled a service that will let users make payments by tapping their Android smartphones together, joining rivals in the market for wireless transactions using near field communication (NFC) technology. The service will allow Android users with a NFC-enabled phone (right now that means the Samsung Nexus S) to initiate mobile payments with one another. What’s the likelihood that both parties have that phone? Mobile payment success will really depend on the retailer.