Here’s why it matters. The earnings season has gotten off to a bit of a rocky start and bullish investors are increasingly nervous about signs of slowing growth and shrinking margins. Some companies have reported strong numbers – see Fairchild Semi, Fastenal, Alcoa – and still gotten punished.
All day today, Google was higher, but tech shares were mostly lower. Titans such as Apple, Microsoft, Cisco and Intel are all trading well off recent highs. Toss in the cool reception for Research in Motion’s new PlayBook tablet and the scene from techland, broadly defined, looks a little rocky. Google’s miss doesn’t help matters.
Here’s why it may not matter. Google famously doesn’t give the Street a lot of help with its earnings estimates. The range coming into this quarter was as low as $7.58 a share and as high as $8.56 a share. (The company reported earnings of $8.08 a share on an adjusted basis.) General Electric, another huge company, has a range of 27 cents a share to 30 cents a share. So, Google sometimes misses, usually crushes.
At the same time, Google may appreciate something that Wall Street doesn’t. It has fallen behind competitors like Facebook in the ever-crucial zeitgeist war. The leaders of the zeitgeist war attract better talent, especially in Silicon Valley. Google – which continues to hire like crazy – knows it needs to play the long – and potentially expensive – game in order to compete against Facebook et al.
Today’s miss is real, and it present new challenges for CEO Larry Page. According to SEC filings, Mr. Page sold 55,556 shares at an average price of $573.14 through a previous planned automatic sales program. After hours, Google traded around $550.
The wall street journal report