Earnings Preview : Google Inc. (NASDAQ: GOOG) – Q1 FY 2011
Tuesday, April 12, 2022 5:20 PM

A global information technology leader, Google Inc. (NASDAQ: GOOG) is expected to report its first quarter FY 2011 earnings on April 14, 2011. In the last four quarter ended December 2010, the company's reported EPS exceeded analysts' consensus estimates for quarters ended March 2010, September 2010 and December 2010, by margins of 2.40 percent, 14.20 percent and 8 percent, respectively. For quarter ended June 201, the reported EPS missed analysts' consensus estimate by margin of 1.10 percent.

Google is a global technology leader focused on improving the ways people connect with information. Google aspire to build products that improve the lives of billions of people globally. Its mission is to organize the world's information and make it universally accessible and useful. Google's innovations in web search and advertising have made its website a top internet property and its brand one of the most recognized in the world.

For the fourth quarter ended December 31, 2010, Google reported revenues of $8.44 billion, an increase of 26% compared to $6.67 billion for the fourth quarter of 2009. Google's GAAP net income in the fourth quarter of 2010 was $2.54 billion, compared to $1.97 billion in the fourth quarter of 2009. Non-GAAP net income in the fourth quarter of 2010 was $2.85 billion, compared to $2.19 billion in the fourth quarter of 2009. GAAP EPS in the fourth quarter of 2010 was $7.81 on 326 million diluted shares outstanding, compared to $6.13 in the fourth quarter of 2009 on 322 million diluted shares outstanding. Non-GAAP EPS in the fourth quarter of 2010 was $8.75, compared to $6.79 in the fourth quarter of 2009.

For full year 2010, the total revenues reported were $29.32 billion, up 24 percent compared to $23.65 billion for FY 2009. Net income for the year was $8.5 billion or $26.31 per share, up 31 percent and 28 percent, respectively, compared to net income of $6.5 billion or $20.41 per share reported in FY 2009.

During the first quarter FY 2011, Google made several acquisitions of smaller companies. On March 7, 2011, Google acquired a comparison-shopping website, BeatThatQuote.com $61.5 million. On March 1, 2011, Google acquired Zynamics, a German analytics company for a undisclosed price. On January 26, Google's YouTube business unit acquired fflick for $10 million. On April 8, 2011, Google also acquired PushLife, an iTunes synching company that gives the ability to sync non-Apple devices to iTunes, for $25 million.

In the Internet Information Providers Industry, Google competes with companies like AOL Inc. (NYSE: AOL) and Yahoo! Inc. (NASDAQ: YHOO). For the trailing 12 months, AOL reported a loss of $7.34 per share on revenues of $2.42 billion, with quarterly revenue growth of negative 26.50 percent. Yahoo! Inc.  reported earnings of $0.90 per share on revenues of $6.32 billion, with a negative quarterly revenue growth of 11.90 percent. On the other hand, Google reported EPS of $26.31 per share, on revenues of $29.32 billion, with a quarterly revenue growth of 26.50 percent.

Google Inc. has a total market capitalization of $189 billion. Google has P/E ratio of 22.34, lower than industry's P/E of 30.10. The P/B ratio of the company is lower at 4.08, compared to the industry's P/B of 5.21. The company's net profit margin is 30.13 percent, better than the industry's margin of 22.30 percent. The ROE of the company is at 20.68 percent, compared to industry's ROE of 14.10 percent. Google currently does not have a stock repurchase program and also does not pay dividends on its common stock.

For the first quarter, analysts' EPS estimates range from a low of $7.58 to $8.73 per share, compared to consensus estimate of $8.13 per share or $6.76 in the year ago quarter. For this quarter, analysts' revenue estimates range from a low of $6.05 billion to a high of $6.51 billion, compared to a consensus estimate of $6.32 billion or $5.06 billion in the same quarter a year ago. For the quarter ended March, 2011, the consensus EPS forecast has been increased from $8.09 per share estimated 60 days ago to the current estimate of $8.13 per share.

In the last 52 weeks, the company's stock has been trading in the range of $433.63 and $642.96. The last trading price of GOOG was $578.16 on April 8, 2011. During the first quarter, Google's stock was initiated at Canaccord Genuity brokering firm with a buy rating.