Thursday, Google (NASDAQ:GOOG) announced another quarter of blowout earnings. The internet giant reported Non-Gaap EPS of $3.91 versus analyst expectations of $3.78 and a whisper number of $3.82. On a reported basis, Google earned $1.07 billion for the quarter, up 46% from the year-ago $733 million. Gross revenue rose 57% from a year ago to $4.23 billion.
These numbers are proof that GOOG still holds a New England Patriot-like dominance on the internet search and advertising playing field. I listened to the entire conference call and liked what I heard. Rather than postmortem the entire quarter, I want to focus on a few major points that elude other journalists who seem to still have sour grapes as I noted in my previous coverage of GOOG at SmartGuyStocks.
First, executives acknowledged that they have and will continue to aggressively monitor head count. “Going forward, you should be comfortable,” CEO Eric Schmidt responded to an analyst question regarding worrisome hiring growth. Thus, when MarketWatch comments that “Google keeps thumbing its nose at the Street,” you have to wonder whether the journalists listen to the entire conference call before prematurely unloading garbage to grab a place in line on YahooFinance.
The MarketWatch article states Google is a renegade elitist that simply refuses to listen to Wall Street or investors. I don’t know about you, but I have a feeling GOOG investors are happy with their return. Further, if more companies followed Wall Street management advice, we’d have a ton more Enron and subprime mortgage explosions in the business world. So, I applaud Google’s effort to think long term. Seriously, doesn’t MarketWatch have editors?
Another horrible article, posted at the Wall Street Journal Online, suggests GOOG will be volatile because the company did not heed the infinite wisdom of some overworked dim-wit analyst at Needham & Co. who called for a stock split. This office pet must be working way over 100 hours a week because he even said splitting the stock will reduce trading volatility and increase institutional ownership. Actually, if the stock splits as recommended (4 for 1), volatility will increase because college students and bored employees will begin day trading GOOG for extra cash while in class or wasting time at work. Moreover, I recently read the Fidelity Mutual Fund guide and noticed heavy institutional ownership of GOOG. So, another crappy article that seems to have slipped by vigilant editors at respected financial websites.
My grandfather once gave me his lifelong secret investing advice: buy the best growth companies of your time and your portfolio will grow nicely. Regardless of what inferior journalists write about Google, the numbers speak for themselves. So long as the company executes in mobile, video, and internationally, I will follow my grandfather’s advice and watch this one grow for the foreseeable future.
Disclosure: SmartGuyDH is long GOOG.