Business
Google Shares Slide, Analysts Stay Upbeat
Shares of Google Inc fell 8 percent after the Internet giant posted a rare quarterly earnings miss and said money paid by marketers for its search ads decreased for the first time in two years.
The search giant underperformed on both revenue and earnings, despite record U.S. online commerce during the holiday season, prompting several brokerages to cut their price targets on the stock.
Google shares were down $50.77 at $588.80 in late morning trade on Friday on the Nasdaq. They had touched a low of $584.81. It was the stock’s biggest percentage fall in 9 months.
About 5.2 million shares changes hands by 1120 ET, more than their daily average volume.
The broader Nasdaq composite index was down 0.25 percent.
Google executives blamed the decline in search ad rates on forex fluctuations and ad format changes but analysts wondered whether mobile advertising, which has lower rates, played a more important role than the company admitted.
The fall in cost per click (CPC) had led to a barrage of questions from analysts during the post-earnings conference call on Thursday.
The market needs to shift expectations to paid click growth and lower its estimates for CPC, Goldman Sachs analysts said in a note.
Google’s heavy investments in mobile and social network initiatives, to stave off competition from rivals Apple Inc and Facebook, and its planned $12.5 billion acquisition of smartphone maker Motorola Mobility Holdings have also raised investors’ concerns.
Larry Page, who took over as CEO in April, said in July that the company was moving to put “more wood behind fewer arrows.”
Analysts said the company has seen growth in display advertising, its Android mobile platform and Google.
Google, its recently-launched social network, has 90 million users now, up from 40 million three months ago.
SOLID CORE
Wall Street analysts called the selloff an overreaction; Barclays said it presents a buying opportunity.
“Don’t judge a book by its cover,” Goldman Sachs titled its research note on Google.
The company’s core results were solid as paid click growth accelerated by more than a third, margins improved, and display and mobile businesses performed well, analysts said.
The acceleration in paid clicks suggests that underlying demand for Google ads is quite healthy across devices, JP Morgan said, adding Google is best-positioned for the shift to new media.
Goldman Sachs analysts said, “We expect the growth in mobile to be 146 percent in 2012 and represent 15 percent of gross sales as we exit fourth-quarter of 2012.”
The company still has strong earnings power that will reappear during 2012, Canaccord Genuity said, reiterating its “buy” rating.
Barclays, Baird, Jefferies and JP Morgan also maintained their top ratings on the stock.
Meanwhile, the biggest tech Dow components, IBM (IBM), Microsoft (MSFT), and Intel (INTC) on Friday reported fourth quarter earnings results. Each member of this tech troika reported slight beats on somewhat weak revenue, particularly in the case of Microsoft. The performances could either be described as “vaguely encouraging” or “benignly disappointing,” depending largely on whether or not you personally own the stocks.
Nonetheless, IBM, MSFT and INTC seem cheap on the basis of earnings multiples. The question is whether or not cheap and bland is actually an investment thesis. According to David Garrity of GVA Research, relatively low variability in performance is going to be the theme that pays for investors in technology this year.
Calling relatively expensive Nasdaq names Google (GOOG) and Amazon (AMZN) the “best houses in bad neighborhoods,” Garrity doesn’t think that’s necessarily going to be a “recipe to drive stock prices higher.” Based on the reaction to Google’s earnings report after Garrity and I spoke, Mr. Market says it’s right not to pay up for “fast growth.”
Which brings us back to Intel and Microsoft, two names in my own portfolio. Though Intel “has not succeeded in stealing the field” for smartphone chips from Qualcomm (QCOM), Garrity says “the company is better positioned for a secular trend” than it’s being given credit for. It’s a view strengthened by Intel’s decision to boost spending by 16% to, at the minimum, stanch the bleeding in market-share loss.
The Federal Capital Territory Administration (FCTA) and other stakeholders have charted path to improved organic agriculture practices nationwide.
At a 2024 national organic and agroecology business summit held recently in Abuja, stakeholders took turn to speak on the additional areas of promoting the practices.
The Mandate Secretary, FCT Agriculture and Rural Development Secretariat (ARDS), Lawan Geidam, advocated for sustainable practice to develop resilient food systems that will benefit people.
The event, with the theme,”Towards Policies for Upscaling Organic Agroecological Businesses in Nigeria”, is aimed at fostering growth in the organic agriculture sector.
Geidam, who was represented by the Acting Director, Agric Services, in the Secretariat, Mr. Ofili Bennett, emphasised the success of organic and agroecological farming, reling on the active involvement of farmers, businesses and consumers.
He reassured attendees that the FCT Administration, led by the Minister, Nyesom Wike, and Minister of State, Dr. Mariya Mahmoud, remains dedicated to supporting initiatives that enhance the livelihood of residents.
Geidam described the partnership between the Secretariat and the organic and Agroecology initiative for a monthly exhibition and sale of organic products in the FCTA premises as a testament to this commitment.
“The ARDS remains committed to driving policies and initiatives that align with national goals and global standards”, Geidam said.
On her part, the Chairperson of Organic and Agroecology Initiative, Mrs. Janet Igho, urged residents to embrace healthy eating habits to sustain a good lifestyle. She stressed the importance of adopting organic practices, highlighting the benefits of going organic, growing organic and consuming organic products.
Igho expressed her optimism regarding the Agricultural Revival Programmes as articulated in President Bola Ahmed Tinubu’s “Renewed Hope Agenda”, which aims at fostering food and nutrition security.
She also extended her gratitude to ARDS for graciously allocating a space in the FCTA premises for the exhibition and sale of organic products, noting that the platform has been effectively used to advance the promotion of organic agriculture in FCT.
Igho outlined several benefits of organic agriculture which includes improved soil health, increased biodiversity, availability nutritious and healthy food and a reduced carbon footprint.
Stakeholders at the summit, underscored the critical need for enhanced private sector involvement and robust capacity building initiatives for farmers.
They highlighted the importance of implementing supportive policies to foster the growth of the organic agriculture sector.
In the light of the significant challenges facing Nigeria’s agricultural landscape, stakeholders decided that organic agricultural practices present sustainable solutions and a pathway for a more resilient and productive farming systems.
The three-day summit featured exhibitions showcasing organic foods, fruits, vegetables and fertilizers, providing an opportunity for residents to better appreciate the benefits of production and consumption of organic agricultural products.
