Google: 5 Analysts Weigh in Following Earnings Bust

Google (NASDAQ:GOOG) had a massive blunder yesterday when earnings were leaked early to Wall Street. Now, five analysts are responding:

Estimates and price target were reduced by Citigroup due to modestly soft core trends after the company’s Q3 results. The firm decided to keep its Buy rating on the stock, under claims that the yesterday’s results were not thesis changing.

RBC Capital reports that the company’s revenue growth, not including currency and currency hedging, reached nearly 25 percent year over year. The firm keeps its Outperform rating but reduced its target to $820 from $850 on the stock.

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According to Piper Jaffray, the company’s weaker core performance than expected for Q3 has the potential to make shares range bound between $650 to $700 before there are any improvements in Q4. The firm believes that the cost-per-clicks drop may renew investor concern regarding mobile monetization, but it keeps its Overweight rating and an $834 price target on the stock.

Jefferies stated that Google’s Q3 miss was related to Motorola and that core search continues to appeaqr healthy. The firm keeps its Buy rating and $850 price target on the stock.

Google shares were defended by Barclays.

Don’t Miss: Oh Google, What Happened?

Google Inc. Earnings Cheat Sheet

Results: Net income for the internet services fell to $2.18 billion ($6.53 per share) vs. $2.73 billion ($8.33 per share) a year earlier. This is a decline of 20.3% from the year-earlier quarter.

Revenue: Rose 18.6% to $11.53 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Google Inc. reported adjusted net income of $9.03 per share. By that measure, the company fell short of mean estimate of $9.31 per share. It beat the average revenue estimate of $8.41 billion.

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 27.4%, with the biggest boost coming in the second quarter when revenue rose 35.3% from the year earlier quarter.

Last quarter’s profit decreases breaks a four-quarter run of profit increases. In the second quarter, net income rose 11.2% from the year earlier, while the figure increased 60.7% in the first quarter, 6.3% in the fourth quarter of the last fiscal year and 25.9% in the third quarter of the last fiscal year.

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the second quarter, it topped the mark by 6 cents, and in the first quarter, it was ahead by 51 cents.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the fourth quarter is $10.52 per share, a drop from $10.61. For the fiscal year, the average estimate has moved down from $37.65 a share to $37.37 over the last sixty days.

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