Google Inc (GOOG) Pre-Release: Analysts React To News

Google Inc (GOOG) Pre-Release: Analysts React To News
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Google Inc (GOOG) Pre-Release: Analysts React To News

Google Inc (NASDAQ:GOOG) Q3 Results Released On SEC Site Prematurely — An 8K with the Q3 EPS Results was released intra-day.

Google Inc (NASDAQ:GOOG) blames the printing company R.R. Donnelley & Sons Company (NASDAQ:RRD) for the early release, according to Bloomberg news.

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Below a statement from Google Inc (NASDAQ:GOOG):

Earlier this morning RR Donnelley, the financial printer, informed us that they had filed our draft 8K earnings statement without authorization. We have ceased trading on NASDAQ NDAQ -0.12% while we work to finalize the document. Once it’s finalized we will release our earnings, resume trading on NASDAQ and hold our earnings call as normal at 1:30 PM PT.

Analysts are now reacting to the news:

Wells Fargo & Company (NYSE:WFC) notes:

  • Gross revenue of $14.1B vs. our est. of $13.5B MMI revs $2.6B ahead of our $2.2B, but below street est of $3.0B ExTAX
  • reveues of $11.33B, below consensus of $11.9B
  • Operating margin 37.3% on exTAC, about inline with our 37.4% estimate.
  • Morola’s Mobility Holdings Inc (NYSE:MMI) operating margin was 6%
  • EPS of $9.03 came in below our estimate of $9.93, and well below consensus of $10.63
  • Paid click growth of 33% about inline with our 32% estimates.
  • CPC down 15% vs. our est of 10%
  • (compares to down 16% in Q2)
  • Wells Fargo & Company (NYSE:WFC) Maintains its neutral rating on Google Inc (NASDAQ:GOOG)

Piper Jaffary notes emphasis ours:

Our initial read on Google’s Q3 earnings report (accidentally released early) is that Google’s core performance was weaker than expected, resulting in the stock’s reaction (down 9% as of this writing). The miss appears to be on the core search side as Google sites revenue was up 2.5% q/q after being up an average of 8% q/q the past two years. CPC rates were down 15% y/y vs the Street at an 11.3% decline. An important takeaway is that the disappointment in CPCs will likely renew investor concern about mobile monetization. In the short term (through December), we now believe shares may be more range-bound between $650 and $700 while investors wait to see improvement in Q4. Despite these issues, we continue to believe that it is a function of time before Google fixes the mobile monetization issue and we maintain our 12-month price target of $834.

Citigroup Inc. (NYSE:C) analysts state (emphasis ours):

Google Inc (NASDAQ:GOOG) Consolidated Results Came In Light — $14.1B in Gross Revenue, $11.3B in Net Revenue, $3.80B in Non-GAAP Operating Income & $9.03 in non-GAAP EPS all came in below the Street ($14.6B, $11.9B, $4.23B, and $10.57). Bottom line divergence partly due to Amortization expenses, which came in at $317MM vs. our $197MM estimate. That contributed perhaps $0.40 of the EPS shortfall. Another major delta was Motorola, which generated $151MM Op Loss vs. our $28MM estimate.

Incrementally “Negatral” First Pass — Core  Google Inc (NASDAQ:GOOG) results were generally in-line to a tad-shy vs. expectations. The biggest deltas were MMI and Amortization related. Not thesis changing, in our view.

Shares of Google Inc (NASDAQ:GOOG) have been halted pending further news. Shares of Google Inc (NASDAQ:GOOG) are currently down 9%.

Disclosure: No position in Google

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