Google Inc (NASDAQ GOOG) is a Mountain View, California based multinational corporation that specializes in Internet-related products and services. The Internet giant has a variety of services including search engines, online advertising, cloud computing, and software. Google announced its substandard third quarter report on Thursday, October 16th, making this the fourth consecutive quarter in which the company has fallen short on earnings expectations.
In its Q3 results, Google reported $6.35 earnings per share on a non-GAAP basis, falling short of analysts’ expectations of $6.53 by $0.18. During the same quarter last year, the Internet giant posted $5.63 earnings per share. The company earned revenue of $16.52 billion, compared to the analysts’ consensus estimate of $16.59 billion. Google’s quarterly revenue went up 20.0% on a year-over-year basis. On average, analysts expect Google will post $25.66 earnings per share for the current fiscal year.
One reason for Google’s sub-par Q3 report is due to the company’s operating cost rising over $1.5 billion over the past year, an increase caused by a hiring surge of nearly 3,000 new employees. Despite the cost increase, Google did not seem too distraught by the underwhelming Q3 report. CFO Patrick Pichette noted “Google had another strong performance this quarter, with revenue up 20% year on year, at $16.5 billion. We continue to be excited about the growth in our advertising and emerging businesses.”
Google Inc (NASDAQ GOOG) News: Q3 Report
On October 17, Gene Munster of Piper Jaffray reiterated an Overweight rating for Google but cut his price target from $645 to $630. He was not fazed by Google’s less-than-stellar Q3 report because he does “not see anything in the results to give… longer term concern about the prospects of Google Inc (NASDAQ GOOG).” Munster is ranked #1 out of 3,358 analysts on TipRanks. He has a success rate of 66% recommending stocks and a +26.2% average return per recommendation.
Separately on October 17, Michael Graham of Canaccord Genuity Maintained a Buy rating for Google but lowered the price target from $715 to $700. Graham remains impressed by Google’s “strong core growth” and “the rewards to be reaped from a multi-year, multi-billion dollar obsession with building the ultimate search platform.”
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Google Inc Financial News (NASDAQ GOOG)
Shares of Google opened at $526.51 on Friday, October 17th. The company has a 1-year high of $604.83 and a 1-year low of $502.80. The stocks daily moving average is $519.76 and has a 50-day moving average of $570.31. The market cap for Google is $345.75 billion and its P/E ratio is 26.49.
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