Google does it again

[DanS]

That's what I've decided. It might visit 300 and, as these things go, the option value marches up very quickly along a steep curve at around that mark.

[DanS]

GOOG dropped $15 this morning because of an unfairly slanted article from Barron's.

http://online.barrons.com/article/SB113961805110771361.html?mod=9_0002_b_this_weeks_magazine_home

GOOG is starting to fall at the slightest provocation rather than rising at the slightest provocation as happened a month or two ago. Amazing how quickly moods turn sometimes.

[One_more_turn]

The article is quite poorly researched. The author is basically saying that GOOG's EPS will drop because they will be spending money on new projects.

I sold some Feb 300 GOOG puts on Monday at $1 per share

[DanS]

Google does it again. Blows past even the optimistic Wall Street estimates.

Earned $592 million on revenue of $2.25 billion. ~ 60% earnings growth (50% on a diluted per-share basis) from a year ago. ~80% revenue growth. Excluding Traffic aquisition costs, sales rose a cool 92% from the year ago quarter.

I believe my options are now worthless, but it's tough to hold that against Google, since they're kicking so much ass.

[DanS]

The WSJ's article on the earnings.

Google's Net Surges,
Powered by Jump in Revenue
Web-Search Titan Benefits
From Strong Advertising
And Expansion Overseas
By KEVIN J. DELANEY
April 21, 2006

Google Inc. said first-quarter profit rose 60% and revenue jumped 79%, as it continued to benefit from strong Web advertising and experienced growth in international markets.

The Mountain View, Calif., Internet-search company also said it is investing heavily in new equipment and facilities and spent $345 million primarily on computer and networking equipment and facilities in the first quarter. In a further sign of its growth ambitions, Google said it expected its capital spending, at $838 million last year, to grow substantially faster than its revenue this year.

Google posted net income of $592.3 million, or $1.95 a share, up from $369.2 million, or $1.29 a share, a year earlier. Revenue rose to $2.25 billion from $1.26 billion.
[Eric Schmidt]

The results exceeded Wall Street estimates. Excluding certain stock-based compensation and other factors, Google earned $2.29 a share. Analysts had projected earnings of $1.97 a share on that basis, according to Thomson Financial. Revenue excluding commissions paid to marketing partners totaled $1.53 billion, above analysts' estimate of $1.44 billion.

"They're hitting the cover off the ball," said Anthony Noto, an Internet analyst at Goldman Sachs, whose firm owns Google shares and has done investment banking for the Internet company within the past 12 months.

Google's strong performance follows other signs of strength in Internet advertising. Yahoo Inc. on Tuesday reported a more-than-30% jump in first-quarter revenue from a year earlier, citing ad strength. Separately, the Interactive Advertising Bureau trade group and consulting firm PricewaterhouseCoopers said the total U.S. online advertising market rose 30% to $12.5 billion last year. Web-search-related ads accounted for $5.1 billion, or 41% of the total, rising about 34% from a year earlier.

Google reported its results after regular trading hours. In 4 p.m. composite trading on the Nasdaq Stock Market, Google was up $4.50 to $415. In after-hours trading, Google was quoted at $448.31. In January, when Google's results fell short of analysts' forecasts, its shares plunged more than 16% in after-hours trading.

"We basically have good news across the board," Chief Executive Eric Schmidt said in a conference call with analysts yesterday. Google executives didn't provide financial forecasts. Mr. Schmidt in an interview said that Google planned to release a large number of new products this quarter and next quarter, which "sets the stage for even stronger user-traffic growth and revenue growth." He said that the rate of new product introductions was accelerating from last year. Mr. Schmidt added that the new products would come in many different areas, citing a "much larger search index, much better search results and on many more devices" as some areas of expected improvements.

Google's earnings were "very clean, very strong," said Youssef Squali, an Internet analyst at Jefferies & Co. in New York, whose firm makes a market in Google shares. Mr. Squali said Google's guidance on capital expenditures was "surprisingly high." But, he added, "we'll look the other way given the underlying strength of the business."
[on the rise]

Google generates about 99% of its revenue selling advertisements displayed alongside Web-search results and other Web content. It is the top Web-search site in the world by number of search queries handled, ahead of Yahoo. Google handled 49% of U.S. search queries in March, up from 47% a year earlier. Yahoo handled 23% of such queries last month, up from 21% in March 2005, according to research firm NetRatings Inc. Microsoft Corp. is No. 3, and its 11% share last month was down from 14% in March 2005.

Advertising on Google's own Web sites represented 58% of revenue, slightly higher than the 57% of the previous quarter. The company brokers ads that appear on other Web sites, taking a commission on that ad revenue, which averaged about 22% during the quarter. International operations formed 42% of Google's revenue, compared with 38% the previous quarter. Google's staff rose 20% to 6,790 employees as of March 31, up from 5,680 at the end of 2005.