Apr. 16, 2014, 4:02 PM
Apr. 16, 2014, 12:10 AM
Apr. 15, 2014, 5:35 PM
Jan. 31, 2014, 11:44 AM
- 13 sell-side firms have upped their Google (GOOG +3.6%) PTs following the company's mixed Q4 results and split announcement. Shares remain higher on a down day for equities.
- Google's market cap now stands at $395B, and its enterprise value (market cap - net cash/investments) of $342B exceeds Apple's $301B.
- Needham (Buy, PT raised to $1,350 from $1,150) is pleased with Google's accelerating international paid click growth (likely driven by mobile), and the strong performance of its "Other Google Revenue" segment (fueled by the Nexus 5 and Chromecast).
- RBC (Outperform, PT upped to $1,400 from $1,300), like others, is happy Motorola ($384M Q4 op. loss) will soon be out of the way, and notes Google's core international revenue rose 30% Y/Y. It's also pleased traffic acquisition costs remain under control, and isn't too worried heavy investments led Google's core op. margin to fall 220 bps Y/Y.
- UBS (Buy, PT raised to $1,350 from $1,300) thinks Google's cost per click (-11% Y/Y in Q4) will improve as Enhanced Campaigns and product listing ads gain more traction.
- Shares currently go for 20x 2014E EPS (exc. net cash).
- More on Google, CC transcript
Jan. 30, 2014, 4:31 PM
- Google's (GOOG) paid click growth, boosted by mobile searches and product listing ads (PLAs), continued to accelerate in Q4. Paid clicks rose 31% Y/Y after growing 26% in Q3 and 23% in Q2.
- At the same time, mobile continues taking a toll on ad prices: cost per click fell 2% Q/Q and 11% Y/Y after dropping 8% Y/Y in Q3 and 6% in Q2.
- Google Sites revenue (67% of revenue exc. Motorola) rose 22% Y/Y, the same as Q3. Ad network revenue (23% of total), pressured lately by policy changes meant to improve the user experience, rose 3% vs. 1% in Q3. Other Google revenue (10% of total - Nexus, search appliances) rose 99% vs. 85%.
- Opex was 33% of revenue, even with a year ago. A hefty $2.26B was spent on capex. Free cash flow was $2.98B, less than net income of $4.1B.
- International sales made up 56% of revenue, flat Q/Q and up from 54% a year ago. Traffic acquisition costs were 24% of revenue, even with Q3 and down from 25% a year ago.
- Ahead of the Lenovo deal, Motorola Mobility had Q4 revenue of $1.24B (-18% Y/Y), and an op. loss of $384M.
- Google ended Q4 with $58.7B in cash/investments (much of it offshore), and $5.5B in debt.
- Investors take the numbers in stride, GOOG +0.1% AH. CC getting started.
- Q4 results, PR, slides
Jan. 30, 2014, 4:03 PM
Jan. 30, 2014, 12:10 AM| 2 Comments
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Jan. 28, 2014, 2:40 PM
- Jefferies has upped its Google (GOOG +1.8%) PT to $1,300 from $1,150 ahead of Thursday's Q4 report. Citing ad partner data, traffic trends, and the firm's product listing ad study, the firm thinks Google's search ad business was "firing on all cylinders" in Q4. Expectations have risen a bit since Google delivered strong Q3 results in October.
- Following up on its initial report about Google's acquisition of A.I. startup DeepMind, re/code reports DeepMind was working on at least three products: "A game with very advanced game AI, a smarter recommendation system for online commerce and something to do with images."
- Meanwhile, an early investor gushes about DeepMind's talent. "If anyone builds something remotely resembling artificial general intelligence, this will be the team ... Think Manhattan Project for AI."
- Google has already been investing heavily in A.I., a technology that arguably touches everything from Google Now to self-driving cars to Nest's thermostats to Boston Dynamics' robots. Google has already hired inventor/futurist Ray Kurzweil to help create a deep learning algorithm to help decipher the meanings of natural-language search queries and article texts. DeepMind's team could assist with that effort.
- In partnership with health insurance provider VSP (previous), Google has rolled out $225 prescription glass frames that work with Google Glass. There's still no word on when Glass itself will see a full commercial launch.
Oct. 17, 2013, 4:24 PM
- Google's (GOOG) ad prices (cost per click) fell 4% Q/Q and 8% Y/Y in Q3, after dropping 2% Q/Q and 6% Y/Y in Q2. However, its paid clicks rose 8% Q/Q and 26% Y/Y, an improvement from 23% Y/Y growth in Q2 and 20% in Q1. While the mobile transition (and perhaps Enhanced Campaigns) continues to pressure ad prices, it's also giving a lift to search volumes.
- Traffic acquisition costs fell to 24% of ad revenue from 25% in Q2 and 26% a year ago. International made up 56% of revenue, up from 55% in Q2 and 53% a year ago.
- Google Sites revenue (68% of Google segment revenue) +22% Y/Y, up from +18% in Q2. Google Network revenue (3rd-party sites, 23% of total) only +1%, down from Q2's +7% and Q1's +12%, as stricter policies continue taking a toll. Other Google Revenue (inc. Nexus hardware and search appliances, 9% of total) +85%.
- Motorola Mobility, which launched the Moto X and new Droid models, posted revenue of $1.18B, +18% Q/Q but -34% Y/Y. The unit had a $248M op. loss.
- Opex +9% Y/Y and accounting for 34% of revenue vs. 35% a year ago. Capex was $2.29B, up from Q2's $1.6B. Free cash flow was $2.79B, below net income of $3.64B. Headcount rose by 1.6K to 46.4K.
- GOOG +5.9% AH. CC at 4:30PM ET.
- Q3 results, PR, slides
Oct. 17, 2013, 4:03 PM
Oct. 17, 2013, 12:10 AM
Oct. 16, 2013, 5:35 PM
Jul. 19, 2013, 1:06 PMCompared with Microsoft, Google (GOOG -1.6%) is getting off lightly for its June quarter miss, as the sell-side argues the shortfall stems from near-term transitions - improving mobile monetization/conversions with the help of Enhanced Campaigns, enforcing stricter ad network policies - rather than long-term problems. "We've seen this before, and we're not concerned," says Jefferies (Buy) about the ad network slowdown." BMO (Market Perform) points out Enhanced Campaigns are lifting click-through rates and ROIs, particularly for "large chain businesses" such as retailers and restaurant chains. VCLK -4.1%. (Q2: I, II, III) (transcript) | 2 Comments
Jul. 18, 2013, 7:15 PMMobile is "clearly" having an impact on Google's (GOOG) ad prices, but it's not the only factor, management insists on the CC. 75% of AdWords campaigns now leverage Enhanced Campaigns, and 6M+ campaigns have been migrated (up from 1.5M+ in April). But sales chief Nikesh Arora admits the impact of the transition will be gradual. He also promises better data about user activity/intentions will lead to better mobile conversions (and thus higher ad prices). CFO Patrick Pichette declares profitability a requirement for Fiber, and says stricter policy terms for partners have affected Google's near-term ad network revenue growth. Shares -4.1% AH. (Q2: I, II) (live blogs: I, II) | Comment!
Jul. 18, 2013, 4:29 PMMore on Google: Ad prices remain under pressure, likely due to mobile: cost-per-click -2% Q/Q and -6% Y/Y in Q2; they fell 4% Q/Q and Y/Y in Q1. Paid clicks +4% Q/Q and +23% Y/Y, better than Q1's +3% Q/Q and +20% Y/Y. Google Sites revenue (68% of total) +18% Y/Y (same as Q1), ad network revenue (24% of total) only +7%, down from Q1's +12%. Other revenue (inc. Nexus) +138% to $1.05B. International 55% of sales (same as Q1). TAC steady at 25% of revenue. Motorola sales -4% Q/Q to $998M. Capex was $1.6B, up from Q1's $1.2B. Google headcount rose by 2.4K Q/Q to 40.2K, Motorola Mobility headcount fell by 50%+ to 4.6K. R&D spend +29% Y/Y to $2B, sales/marketing +23% to $1.7B, G&A +27% to $1.2B. GOOG -5.2% AH. (PR) | 4 Comments
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