Google’s invincibility remains intact for now, not even a weakening U.S. economy could impact the search engine giant. Google earned $1.31 billion, or $4.12 per share, during the first three months of the year – a 30 percent increase from net income of $1 billion, or $3.18 per share, in the first quarter of 2007. Google said it would have made $4.84 per share if exclude one-time items and stock option expenses, therefore beat Thomson Financial projection of $4.52 per share. 
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So what was the surprise in the closet? It’s hard to predict that the international revenue rocketed and accounted for 51 percent of the total Google’s revenue this time around, surpassing U.S. revenue for the “first time” *Wow!*. Google’s stock staged a huge gap-up of about 17 percent or $76 to $525 a share after-hours trading, their highest since Feb 2008 *Ouch!*. And so FinanceTwitter goes down the drain together with ComScore Inc. (Nasdaq: SCOR, stock) which plunged more than 8 percent or $1.98 per share.
Despite Google’s reassuring first quarter, some analysts and investors remain cautious because so much of the company’s advertisement revenue comes from small and midsize businesses more apt to curb their spending if the economy’s woes worsen – reported AP.
Google Inc. (Nasdaq: GOOG, stock) is smart to not provide any guidance as with other companies, thus eliminate another tool that could be used by analysts or investors to whack the stock the other way round. And I believe Google will continue to ignore the request to issue guidance. You should have experienced how a lower guidance issued could turn the table over companies that otherwise reported a set of good earning. A good example is Intuitive Surgical Inc. (Nasdaq: ISRG, stock).
It’s puzzling why the stock was beaten down after-hours trading despite a yet another excellent earning. ISRG’s first-quarter profit surged a whopping 88 percent to $44.8 million or $1.12 per share from $23.8 million (or 62 cents per share) in the same quarter a year earlier, mind you. Thomson Financial expected income of only 98 cents per share on $178.2 million in revenue. So what’s the problem here? People said it could be the bearish call spread on the stock but others said the guidance issued was not good enough.
The good thing about investing in U.S. stocks market is the fact that it’s a “two-way” street. You can long or short, buy Call or Put options. If you’re convinced the stock has a fantastic story then continues to hold it. On the other hand if you believe the stock’s trend has reversed due to the latest story then goes to the other flip of the coin. Just do something and stop moaning. What could you learn from the Google’s trade? Trading options and stocks based on earning is a risky business. But then high-risk high-gain and can you imagine the potential profits for those who were bullish on Google? Bottom line is if you can’t take the loss, then don’t trade such a volatile stock. Let’s see if Google can maintains the momentum after the opening bell.
Other Articles That May Interest You …
- Waiting for GOOG earning, any Giant Slayer out there?
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- What can you learn from the top Fund Managers?
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April 18th, 2008 by financetwitter
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You win some, you lose some. You made the best decision based on what you know and pulled out of a possible loss with some gain. No harm done and still a good trade. Best of luck in your next one!