Google's earnings are back on the track that analysts expected at the beginning of the year. I wouldn't be surprise the next couple of quarters of earnings estimates to be revised higher in the near future. Here's a chart of % growth of acutal eps, exepcted eps and stock price (with the just-released quarter not yet included):
Google may be considered a high tech company, but the bulk of their revenues still come from advertising and they are probably more exposed that most other software/internet companies to macro fluctuations. As shown in the above chart, GOOG's earnings were hit hard during the apex of the crisis at the end of 2008. The fact that GOOG missed big in Q1 of 2011 before QE 2 had a chance to fully kick in may also be more than a coincidence.
Make no mistake, this was a stellar earnings report and Google's core search business remains impregnable. Beyond search, Android is a clear hit but is not creating any direct revenue since Google is still giving it away, YouTube generates ad revenue but I haven't seen the detailed numbers to know exactly how much of an impact it is having and even with all the recent hype surrounding Google+, how much staying power will it really have? Facebook appears as entrenched in social media as Google is in search.
(Click on the images for a larger view.
Click here for the current chart of GOOG stock price.
Click here for the chart comparing % growth of eps actuals, eps estimates and stock price.)
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