Wednesday, October 20, 2004
Smartmoney.com: Breaking News: Analyst Views Diverge on Google's First Quarterly Report:
" Published: October 20, 2004 1:28 AM
Internet-Search pioneer Google (GOOG) reports its first quarterly results as a public company Thursday, but there's little agreement on what those results will be, Wednesday's Wall Street Journal reported.
Analysts' estimates for Google's third-quarter earnings, excluding several expenses, range from 22 cents to 61 cents a share, according to Thomson First Call. For 2005, the range of earnings estimates is equally dramatic: from $2.01 to $3.88 a share.
"That is a tremendous" variance, says Youssef Squali, Internet analyst at Jefferies in New York, who has a "hold" rating on the shares and whose firm makes a market in Google. "You see analysts with clearly divergent views."
The reason for the broad spread? Google refused to offer financial projections during the preparations for its initial public offering of stock in August, breaking with Wall Street practice and annoying some institutional investors. Executives aren't expected to be any more forthcoming Thursday. Co-founders Sergey Brin and Larry Page said in the prospectus that they would run Google unconventionally, particularly when it comes to financial forecasts. "Although we may discuss long-term trends in our business, we do not plan to give earnings guidance in the traditional sense," they wrote in their folksy statement, citing investor Warren Buffett as inspiration.
As a practical matter, Google's stance leaves analysts and investors scratching their heads about what to expect from the company.
The variance in investor expectations may help explain the unusual volatility in Google shares, which have climbed about 75% since the IPO. The average spread between Google's daily high and low prices over the past month is 3.5%, compared with 2.9% for rival Yahoo and 1.4% for the 100 largest companies trading on the Nasdaq market, according to calculations by research firm Birinyi Associates.
Wall Street Journal Staff Reporter Kevin J. Delaney contributed to this report.
(END) Dow Jones Newswires
10-20-04 0128ET"
" Published: October 20, 2004 1:28 AM
Internet-Search pioneer Google (GOOG) reports its first quarterly results as a public company Thursday, but there's little agreement on what those results will be, Wednesday's Wall Street Journal reported.
Analysts' estimates for Google's third-quarter earnings, excluding several expenses, range from 22 cents to 61 cents a share, according to Thomson First Call. For 2005, the range of earnings estimates is equally dramatic: from $2.01 to $3.88 a share.
"That is a tremendous" variance, says Youssef Squali, Internet analyst at Jefferies in New York, who has a "hold" rating on the shares and whose firm makes a market in Google. "You see analysts with clearly divergent views."
The reason for the broad spread? Google refused to offer financial projections during the preparations for its initial public offering of stock in August, breaking with Wall Street practice and annoying some institutional investors. Executives aren't expected to be any more forthcoming Thursday. Co-founders Sergey Brin and Larry Page said in the prospectus that they would run Google unconventionally, particularly when it comes to financial forecasts. "Although we may discuss long-term trends in our business, we do not plan to give earnings guidance in the traditional sense," they wrote in their folksy statement, citing investor Warren Buffett as inspiration.
As a practical matter, Google's stance leaves analysts and investors scratching their heads about what to expect from the company.
The variance in investor expectations may help explain the unusual volatility in Google shares, which have climbed about 75% since the IPO. The average spread between Google's daily high and low prices over the past month is 3.5%, compared with 2.9% for rival Yahoo and 1.4% for the 100 largest companies trading on the Nasdaq market, according to calculations by research firm Birinyi Associates.
Wall Street Journal Staff Reporter Kevin J. Delaney contributed to this report.
(END) Dow Jones Newswires
10-20-04 0128ET"
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