{"id":189,"date":"2006-01-31T17:34:17","date_gmt":"2006-01-31T22:34:17","guid":{"rendered":"http:\/\/www.mathewingram.com\/work\/index.php\/2006\/01\/31\/google-misses-but-will-it-matter\/"},"modified":"2006-01-31T17:34:17","modified_gmt":"2006-01-31T22:34:17","slug":"google-misses-but-will-it-matter","status":"publish","type":"post","link":"https:\/\/mathewingram.com\/work\/2006\/01\/31\/google-misses-but-will-it-matter\/","title":{"rendered":"Google misses – but will it matter?"},"content":{"rendered":"

Google may be working on a version of the Ubuntu Linux OS, as reported by The Register, but maybe it should be spending a bit more time on a good accounting app — it just missed Wall Street’s estimates <\/a> for both sales and profit for the latest quarter. The stock dropped by as much as 19 per cent in after-hours trading<\/a>.<\/p>\n

Does that matter to the company’s long-term future? Probably not. But it will likely take some of the shine off for the momentum traders, of whom there are likely a lot. And there were some troubling signs in the numbers at first glance — even if you assume that the analysts’ estimates<\/a> were inflated (which they likely were). For one thing, the company’s tax rate was substantially higher than expected – 41 per cent instead of about 26 per cent – and costs were also higher than anticipated. Too much money being spent on projects like the lame addition of bookmarks<\/a> to the Google toolbar perhaps?<\/p>\n

One caveat: Even assuming that a majority of analysts are craven weasels (just kidding, guys) it is difficult for analysts to analyze a company that is not only growing at an incredible rate, but which refuses to provide any guidance<\/a> on future results, or any details on current operations. That’s going to make future surprises even more likely.<\/p>\n

Update:<\/b><\/p>\n

As usual, some of the hysteria that is common with after-hours trading (when there is less volume and therefore more volatility) dissipated on Wednesday, but Google’s stock was still down<\/a> almost 10 per cent at one point in the morning. Not surprising, given the number of momentum traders that are riding this particular horse. Although UBS has downgraded the stock<\/a> to “neutral” – in other words, closing the door after the horse has left the stable – Google’s explanation that the higher tax rate accounts for the bulk of the miss seems plausible. And the company has said it will provide more details on that kind of thing.<\/p>\n

In the end, there’s no real smoking gun in these results for the Google bears – although my friend Paul Kedrosky notes that it’s worth asking why the tax rate was so much higher<\/a> than expected. And whatever the answer to that question, Google’s “miss” serves as a healthy warning to investors. As the old saying goes, bulls make money and bears make money, but pigs often get slaughtered.<\/p>\n

<\/div>","protected":false},"excerpt":{"rendered":"

Google may be working on a version of the Ubuntu Linux OS, as reported by The Register, but maybe it should be spending a bit more time on a good accounting app — it just missed Wall Street’s estimates for both sales and profit for the latest quarter. The stock dropped by as much as … <\/p>\n

Continue reading “Google misses – but will it matter?”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crsspst_to_mathewingramblogwordpresscom":false,"mf2_syndication":[],"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-189","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/posts\/189","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/comments?post=189"}],"version-history":[{"count":0,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/posts\/189\/revisions"}],"wp:attachment":[{"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/media?parent=189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/categories?post=189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/tags?post=189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}