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Google shares soar in early trading, up more than $70

AnimalMagnetism

Self Imposed Exile
Apr 21, 2006
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Google shares soar in early trading, up more than $70

Investors rewarded Google on Friday for strong second quarterly earnings results, with shares up more than 13 percent in early trading. Google traded $599.69, up $70.75, or 13.38 percent soon after the opening bell. The stock closed at $528.94 yesterday. Shares rose more than 10 percent overnight in after-hours trading. Google opened at $597.87 this morning.

Google announced Q2 earnings late yesterday. Revenues rose 32 percent to $9.03 billion, year over year; net income climbed to $2.51 billion up from $1.84 billion a year earlier. That's $7.68 earnings per share. Operating income was $2.88 billion.

The earnings report is an important one for Google by several measures: Gauging performance despite global economic malaise, giving sense of online ad market strength and showing whether or not Larry Page is the right man in charge. The Google cofounder reassumed the chief executive's position, after a decade's absence, on April 4.

As I've expressed so often: In business, perception is everything. Last night, during Google's earnings call, Page exuded confidence backed up by record-breaking results. Google announced Page's return in late January and a transition period until April 4. The question coming into the earnings report: how much of what's happening now is reflective of Page in charge. During the third quarter, for example, Google has started something of a major makeover, anchored by the +1 button and Google+. Last night, during the earnings conference call, Page claimed ownership.

"Google+ is also a great example of another focus of mine", he said. "Simple products that are simple and intuitive to use and was one of the first products to contain our new visual redesign". Along with Calendar and Gmail, many other products will be updated with a new look, too, Page said.

"Over 10 million people have joined Google+", Page said yesterday. "That's a great achievement for the team". He added that "more than 1 billion items are shared and received in a single day. Our +1 button already is all over the web. It's being served 2.3 billion times a day".

Page isn't the most charismatic speaker, but nevertheless he conveyed leadership and vision yesterday. "I see more opportunities today for Google than ever before. Believe it or not, we are still in the early stages of what we want to do, even in search," Page said. Well, hell, for years Microsoft CEO Steve Ballmer has used "early days" as an argument for Bing catching Google.

Other numbers surely excited investors. Android activations are now 550,000 a day. Less than three weeks ago, the number was 500,000 a day. There are 135 million active Android devices, which is substantially less than Apple's 200 million iOS devices. But Android's strength is nearly all from smartphones, which sales pace is more than twice that of iPhone based on activations.

Another stat: One hundred sixty million people use Chrome, again an impressive number.

Other Q2 earnings highlights:

Google has $39.1 billion in cash equivalents and marketable securities

Traffic acquisition costs were $2.11 billion, or 24 percent of ad revenues

54 percent of revenues, totaling $4.87 billion, came from outside the United States

Revenue from adSense rose 20 percent to $2.48 billion, or 28 percent of total revenues


Looks like Larry Page is the right man for the job. there were a few concerns about that, but no more.
 

AnimalMagnetism

Self Imposed Exile
Apr 21, 2006
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0
36
Toronto
Investors toast Google results, shares surge

The better-than-expected results and successful Google+ launch should stem some of the short-term stock angst about their investment and development strategy, Maynard said.

Evercore analyst Ken Sena raised his price target on the stock to $735 from $670, while Collins Stewart analyst Mayuresh Masurekar raised his price target to $725 from $680.

Jefferies raised its target on the stock to $830 from $800, while Barclays Capital lifted its target to $730 and $675.

All five brokerages kept their top ratings on the stock, which was trading at $595.80 in late morning trade.

Google shares, publicly traded since 2004, hit their all-time high of $741.79 in November 2007.

"We are witnessing signs of increased competitive advantage for Google, particularly in Display and Local, with Search showing no signs of slowing," Sena said.
 
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