Google Inc (NASDAQ:GOOG) will report its first quarter results on April 16 after the bell. JPMorgan analysts Doug Anmuth, Bo Nam and Kaizad Gotla expect the company to report $6.56 per share in Q1 earnings. They expect 2014 and 2015 earnings to come at $28.05 and $33.85 respectively. Note that these earnings reflect a new 2-for-1 stock split with class-C shares. Investors will receive one class-C share for each class-A and class-B shares they own.
Both of Google’s class-A and Class-C shares will be included in the S&P 500
Google Inc (NASDAQ:GOOG)’s class-C shares have a record date of March 27, and will officially begin trading on April 3. The stock split is aimed at giving a retaining control over the company to its co-founders Larry Page and Sergey Brin because the new class-C shares will have no voting rights. It will also lower the share price, making it more affordable to individual investors. The S&P Dow Jones Indices has said that both types of shares, class-A and class-C will be included in the S&P 500 index. The class- A shares will trade under the ticker “GOOGL” while Class-C shares will trade under “GOOG” ticker. Class-B shares are exclusively owned by the co-founders, and each class-B share has 10 times more voting rights than a class-A share.
Continued from part one... Q1 hedge fund letters, conference, scoops etc Abrams and his team want to understand the fundamental economics of every opportunity because, "It is easy to tell what has been, and it is easy to tell what is today, but the biggest deal for the investor is to . . . SORRY! Read More
The stock split will double the number of outstanding shares, and the stock price will be divided into half. Just for comparison, Google Inc (NASDAQ:GOOG) will report its Q1 earnings as if the stock had already been doubled during those periods. JPMorgan’s revised price target of $675 doesn’t reflect any change in multiple, and is based on 20x 2015E EPS of $33.85. The research firm’s price target estimate is slightly higher than half of the pre-split levels to reflect increased profitability as Motorola Mobility has been moved to discontinued operations. Previously, JPMorgan had a price target of $1,325 on the stock. The research firm reiterates its Overweight rating.
Google Inc (NASDAQ:GOOG) sold Motorola Mobility to China’s Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) in January this year for $2.91 billion. The search engine giant will retain its control over most of Motorola’s patents. JPMorgan says the sale will strengthen Google’s relationship with the Android ecosystem.
Google Inc (NASDAQ:GOOG) shares inched up 0.29% to $1,123.45 at 11:34 AM EDT.