Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn't necessarily translate into a huge pop for a stock.
During earnings season, BullMarket.com publishes a comprehensive 20- to 30-page Earnings Preview report for the week ahead each Friday.
Over the past two years, BullMarket.com has used the data it has collected to correctly predict investor reactions for approximately two-third of the stocks it's previewed.
In an earnings preview supplement, BullMarket.com previews the upcoming earnings for Google (Nasdaq: GOOG - News). On Friday, meanwhile, BullMarket.com will publish its first full earnings preview of the season featuring Intel (Nasdaq: INTC - News), Cree (Nasdaq: CREE - News), IBM (NYSE: IBM, and Qualcomm (Nasdaq: QCOM - News), F5 Networks (Nasdaq: FFIV - News), eBay (Nasdaq: EBAY - News), Chipotle (NYSE: CMG - News), Microsoft (Nasdaq: MSFT - News), and Intuitive Surgical (Nasdaq: ISRG - News).
While BullMarket.com previews the upcoming earnings for Google, here is a look back at the company's last quarterly report:
Last quarter, Google reported a rare earnings and revenue miss though the company delivered what would normally be considered pretty solid results.
Google's net income as reported grew by 6.4% to $2.71 billion, or $8.22 per share, compared with $2.54 billion, or $7.81 per share, in Q4 2010. Excluding the cost of stock options, Google reported $9.50 per share in profit, up from $8.75 last year. Analysts, however, were looking for $10.50 per share.
Net revenue, which excludes traffic acquisition costs (TAC), totaled $8.13 billion, up from $6.37 billion. Once again, Wall Street expected more as the consensus estimate was $8.4 billion. Gross revenue grew by 25% year over year and 9% sequentially to $10.6 billion.
Co-founder and CEO Larry Page said he was pleased with the results, noting it was the first time quarterly revenue surpassed $10 billion, which he declared "pretty exciting. Looking back on 2011, I am most excited by the fact that we significantly improved our velocity and execution, my priority when I became CEO in April."
Looking at other metrics, Google owned and operated (O&O) site revenue grew by 30% year over year to $7.3 billion, and 8% quarter over quarter, with strength across most major geographies and verticals, CFO Patrick Pichette said. Excluding TAC it was up 28% to $6.85 billion
Google Network advertising revenue, net of TAC, was up 15% to $2.9 billion, but it was a smaller part of total net advertising revenues than in the past.
The fourth quarter is normally the company's strongest quarter of the year, aided by holiday-related advertising. Global aggregate paid clicks (CPC) grew by 34% year over year and 17% quarter over quarter. The aggregate cost-per-click growth, however, declined by -8% year over year and quarter over quarter. The decline surprised many analysts but the company emphasized that a number of
factors impact the CPC rate, which is what advertisers actually pay for their online marketing through Google.
Geographically, revenue from the U.S. was up 23% year over year to $5 billion. Non-U.S. revenue accounted for 53% of the total, or $5.6 billion, up 28% year over year, which included a "modest" $25 million benefit from the company's hedging program, Pichette said. The U.K. was up 21% year over year to $1.1 billion.
On the expense front, TAC totaled $2.5 billion, or 24.1% of total advertising revenue. Other cost of revenue was $1.2 billion, excluding stock-based compensation of $77 million. Operating expenses, which exclude stock-based compensation, totaled $2.9 billion. Google's stock-based compensation totaled $459 million.
The adjusted non-GAAP operating profit was $4.0 billion in Q4, resulting in an adjusted operating margin of 38.2%, which Pichette called "a strong margin performance that gives us the confidence to continue to fully fund our strategic growth areas in Search, Display, Mobile, and Apps."
Google also booked an $88 million one-time impairment charge related to its investment in Clearwire (Nasdaq: CLWR - News) and a -$134 million net expense related to the company's currency hedging program.
On the balance sheet, Google ended the year with $44.6 billion in cash and marketable securities,and around $4.2 billion in short and long-term debt.
The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.
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