Thursday, April 8, 2010

Google Inc. (NASDAQ: GOOG): Q1 Earnings Preview 2010

Google Inc. is scheduled to release Q12010 earnings after the closing bell on Thursday, April 15, 2010. Analysts, on average, expect the company to report earnings of $6.56 per share in the first quarter with estimates ranging from a low of $6.05 to a high of $6.91 per share. Revenues for the quarter are estimated to be $4.92 billion. In the Q12009, Google reported earnings of $5.16 per share on revenue of $4.07 billion.

Google Inc., a technology company, maintains index of Websites and other online content for users, advertisers, Google network members, and other content providers. Its automated search technology helps users to obtain instant access to relevant information from its online index.

In the preceding Q42009, the Mountain View, California-based company reported that its net income surged to $1.97 billion or $6.13 per share, from $382 million or $1.21 per share, in the year-ago quarter. Excluding items, net income grew to $2.19 billion or $6.79 per share from $1.62 billion or $5.10 per share in the year-ago quarter. Revenue increased 17% to $6.67 billion from $5.70 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $6.50 per share on revenue of $4.92 billion.

The company has been the undisputed leader in search engine for several quarters now. In February 2010, Google retained its solid number one ranking with a 71% market share, up slightly from 70.4% in January 2010, according to data from compete.

Google has also made headway in efforts to expand into mobile advertising. The mobile search advertising market is rapidly growing as mobile Internet use soars. The number of owners of smartphones, or devices with Internet access and other advanced functions, rose 21% in the U.S. in the three months ended in February compared to the prior period, comScore said. In mobile space, Google is taking on Apple Inc.’s iPhone with its Android operating system. Google has made its Android operating system software available on a variety of different mobile devices. Some 6.8 million Android- powered phones were sold in 2009, accounting for 3.9 percent of the global market, according to researcher Gartner Inc. Google Inc.'s share of the U.S. smartphone market especially rose sharply in the three months ended in February, while rivals Apple Inc. and Microsoft Corp. each lost share, according to a report published by ComScore. ComScore reported that Google's share of smartphone subscribers rose to 9%, compared to 3.8% at the end of November.

After a two-month dispute with China over censorship issues, Google shut its mainland Chinese search engine in March and redirected users to its unfiltered Hong Kong site. Google called the move "entirely legal," and said it will continue research and development activities in China. The move is the latest in Google's feud with China over the censorship of search results. Google was second in the Chinese search market, behind Baidu Inc.

In February, Google Inc. on its corporate blog, announced a plan to build and test ultra high-speed broadband networks in a small number of trial locations across the U.S. The Internet giant intends to offer the service at a competitive price to at least 50,000 and potentially up to 500,000 people.

The internet search giant also introduced Google Buzz in February, which integrates photos, videos and links, and makes them easy to share publicly or privately.

Meanwhile, according to media reports, Google has teamed up with Intel, Sony Corp. to marry Internet content with conventional TV, extending technology into the living rooms. The companies are reportedly working on developing a set-top box running Google's Android operating system for the new platform called Google TV. The box will allow users to access Internet content alongside traditional television programming through the Google Chrome browser, with a user interface designed by Google.

For Google, first quarter was a busy one on the acquisition front. Early in February, Google has acquired social search service Aardvark, says a source that has been briefed on the deal, for around $50 million. Also in February, Google acquired reMail, an app that provides advanced e-mail search capabilities for the iPhone. In March, Google agreed to purchase online photoediting site Picnik, Inc. and Docverse, a service that lets users collaborate around Microsoft Office documents.

In terms of stock performance, Google shares have lost nearly 7 percent since the beginning of the year.

Full Disclosure: None.
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