Wall Street to Google: Stop Spending All Your Money
Google released its Second Quarter Earnings today, and for the first time in years they missed analyst’s predictions. The search giant posted earnings of 3.87 billion, an only 6% increase from the previous quarter, far below Wall Street’s expectations. At the close of the market today, Google’s stock had dropped a little over 7% due to the unimpressive numbers.
Oddly, revenue is not the culprit in Google’s earnings miss. With revenues up 58% from last year, the lack of earnings can rest solely on the shoulders of the (in)famous Google expenses that everyone knows and loves. With everything from gourmet chefs to a free laundromat, this quarter’s expenses totaled $1.21 billion (sucking up 31% of revenues), up 4% from last quarter.
Could this steady increase in expenses mark the beginning of a penny-pinching spree throughout the company, or possibly even the end of the paradise known as the Google Compound?
As a fan of any company willing to offer free food and weekly roller hockey games, I sure hope not.
July 20th, 2007 at 1:12 am
I think you kinda missed it with your analysis. They aren’t loosing money, in fact despite or possibly because of an increase of their employee they increase profits.
Missing the mark set by Wall Street analysts means the analysts messed up, not the company. Further more for their first 6 months the company far outperformed the analysts who were predicting that the value of the stock would plumit after the IPO. So you cant say that they have missed the mark for the first time in years, since analysts have only been saying they would do well for 6 quarters or about 18 months.
July 20th, 2007 at 2:10 am
Since Google went public in 2004, the company has failed to exceed analysts predictions only once before. I do not consider going OVER the mark failing to meet expectations. Who would be unhappy with a company making more than expected?
I was simply commenting on the short-term aspects of Google’s small earnings (stock drop), along with a humorous take on what might be done to remedy it (no more free food).
Also, if you’re speaking in the long term you might want to mention that some of the expenses could be credited to Google’s devlopment, a long-term earner but short term bank-buster. Google has always set out to constantly improve and expand, but it has never taken such a chunk from their earnings.
If you’re interested in looking at cold hard facts and numbers, please take a look at the link of the press release in the article. I’m more here for summarization and giggles. Thanks for the analysis though.
And lastly, nobody said they were losing money. They’re called earnings for a reason.
July 20th, 2007 at 2:16 am
Gota spend money to make money I suppose
March 8th, 2008 at 11:39 pm
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June 6th, 2008 at 4:51 pm
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June 21st, 2008 at 11:24 am
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November 12th, 2008 at 6:08 pm
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