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GOOG Misses

By Johns Wu on Jan 31, 2006

google_logo_black.jpgEveryone probably knows already that GOOG, Google Inc, missed EPS forecasts miserably today. The stock is getting murdered AH. GOOG reported a $1.22 EPS versus a forecasted $1.76 EPS. That is a CRAZY miss. 

However, one important thing I wanted to mention is that a big reason for GOOG's miss last quarter was a tax rate complication. I'm don't know about the details, but basically they were taxed 40% rather than the usual 30%. The miss probably wouldn't have been so severe had they been taxed at the usual 30%. I also read somewhere that charitable donations by GOOG also lowered their reported EPS.

What does this mean? It means that last quarter's miss wasn't really as bad as it seems. In fact, I see this as a good buying opportunity. There is no doubt that the street will continue to slaughter GOOG, simply because the numbers don't lie. However, I will be waiting to scoop up cheap shares for the longterm. I just hope that I don't end up catching a falling knife.

From a technical standpoint, important pivot points are $350 (top of gap), $300, (bottom of gap), and $325 (200 DMA). I'll be watching GOOG closely in the next few days to look for a good long entry. Also, I just wanted to mention that GOOG's chart looks a lot like AMGN's chart.

I dunno, but from these horrible numbers alone, GOOG deserves to be trading at less than $350. It will be interesting to see the street's reaction to today's slightly mixed news.

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This entry was posted on Tuesday, January 31st, 2006 at 4:09 pm and is filed under Market News. You can skip to the end and leave a response. Pinging is currently not allowed.


5 Responses to “GOOG Misses”


By TechTrader on January 31st, 2006 at 4:33 pm

Word. Picked up some in AH around $375. The news tomorrow will be how they actually didn’t miss and the biz looks good.

By Anonymous on January 31st, 2006 at 7:27 pm

Excuses Excuses Excuses of Tax misscalculations. The fact of the matter is their Ad revenew growth has declined lately which is reflecting on their big miss. We are talking about a huge miss here, while the expectations were somewhere in the opposite direction, i.e people expecting a surprise of 2.0+ EPS. I’d say GOOG is going down from here. Where would it stop? only time can tell.

By dan @ C! media on February 1st, 2006 at 1:35 am

OVERSOLD, big time. ben elgin of biz week wrote on WED AM:

“Had the tax rate come in at the expected 30%, Google’s profits would have met analyst expectations. Furthermore, with more companies moving their advertising budgets to the Internet, Google will be well positioned to benefit. And its penetration of budding international markets far exceeds that of chief rivals, Yahoo and Microsoft… But with skeptics emboldened by the miss, a new era of Google scrutiny may be dawning….”

when you go to the movies, and someone yells FIRE, everyone panics and runs. Same thing happened to GOOG on tuesday.

By DaBull on February 1st, 2006 at 6:06 am

Googles miss was expected, last quarter is traditionally the worse for the net. Its a stock that the street was bringing back. So many of those guys missed this, so to me it seems as if they are just piling on. Its a global company an if you see through all the BS you’ll see the real deal. Google will make its money internationally that will hurt numbers alittle until they have Googlized the globe.

By TechTrader on February 1st, 2006 at 8:07 am

Heh…all the funds that wished they held GOOG just got their opportunity to pick up sizeable blocks at a nice panic discount.
The comment from Anonymous up there indicates he wouldn’t know “facts” or “the matter” if it bit him in the ass. If you don’t understand what I’m saying, then stick with mutual funds and ETFs.
Seriously.

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