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.
MoniePoint Inc. a digital financial firm in Nigeria, has said it is empowering community pharmacists across the country with innovative payment solutions to improve access to drugs.
The financial firm said it had also provided loans for pharmacists under the aegis of the Association of Community Pharmacists of Nigeria (ACPN) to drive healthcare delivery in the country.
MoniePoint in a release titled, “Inside Nigeria’s community pharmacies: How Moniepoint drives healthcare access with payments and funding”, has reaffirmed its commitment to providing digital payment solutions to improve health outcomes in Nigeria.
The release examined how community pharmacies play a crucial role as vital access points for medical care in Nigeria, especially in areas with limited hospital or clinic access.
According to the release, the ACPN National Chairman, Ambrose Igwekwam, highlighted the critical role played by community pharmacies in Nigeria’s healthcare system over the years.
Igwekwam, however, expressed concerns over the challenges confronting the nation’s pharmaceutical industry which he said was hindering access to affordable medicines.
The pharmacist listed poor infrastructural systems, power, transportation, regulatory bottlenecks, importation dependency, and limited research opportunities as major challenges facing the pharmaceutical sector.
He also stressed the need for robust collaborative efforts with institutions like Moniepoint to strengthen the sector.
“As Nigeria continues to grow, improving local pharma manufacturing to meet the demands of this growth presents a key opportunity for us all.
“There is also the African Continental Free Trade Area Agreement, which is expected to boost our industry, especially when we start producing our drugs locally, which will provide the much needed foreign exchange from exports.
“We are also seeing advancements in digital health and technology which would hopefully deepen the practice of e-prescription in Nigeria”, the ACPN boss said.
Corlins Walter
In order to enhance customer service and streamline operations, the Chartered Insurance Institute of Nigeria (CIIN) has called on stakeholders in the insurance industry to embrace Artificial Intelligence (AI).
The President of the institute, Yetunde Ilori, made this call at the 2024 Office Representatives Committee (ORC) Workshop, organised by the institute, with the theme “AI and the Future of the Insurance Industry”, in Lagos.
Ilori at the event, emphasised the importance of AI adoption, noting that it was not a threat to jobs but rather a tool to improve efficiency across the insurance sector.
“It is not about AI taking over our jobs, but about us using AI to simplify processes and give maximum satisfaction to all the customers we serve whether as underwriters, brokers, loss adjusters, or in educating our members”, she said.
The workshop, which brought players in the insurance sector together, aimed to address how AI could be leveraged to transform business processes and improve customer interactions.
The Chairman of the ORC, Monica Nwachukwu, underscored the role of AI in modernising the industry, adding, “AI can automate customer and claims processes, allowing insurers to provide faster and more efficient services to their customers”.
She explained how AI could help extract data from legacy systems, enhancing decision-making processes.
“By integrating AI with APIs, insurers can feed valuable data into AI solutions to improve operations and customer service”, she added.
In his address, the Managing Partner of A4S and Training Heights, Orlando Odejide, stressed the need for companies to align their strategies with future technologies like AI, especially as they prepare for 2025.
“Any organisation that wants to grow into the future must have its strategic plan in place. If your strategy for 2025 is not ready, it should be done by October”, he advised.
He encouraged participants to think critically about how AI could be integrated into their business models to ensure they remain competitive.
“The idea is for you to use this workshop as a platform to think about your organization and how AI can help streamline your processes and improve growth”, Odejide noted.
In order to gain global respect and recognition, the National Space Research and Development Agency (NASRDA) has reaffirmed its determination to pursue its goal in ensuring that Nigeria’s space capabilities are recognised on the world stage.
The agency also reaffirmed its commitment to positioning Nigeria as a key player in the global space economy.
In a statement by the Director of Media and Corporate Communications, Dr. Felix Ale, NASRDA revealed that the Director-General of the agency, Matthew Adepoju, emphasised this during recent engagements at the 79th United Nations General Assembly and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Global Alliance Business Association international conference in Michigan, United States.
The statement noted that Adepoju outlined a forward-thinking agenda, stressing the importance of Nigeria’s space programme as a leader in research, exploration, and technological innovation.
“Our goal is to ensure that Nigeria’s space capabilities are recognised on the world stage.
“We must foster collaborations with global space agencies to enhance our satellite capabilities and technological infrastructure”, he stated.
The NASRDA boss said the agency is focusing on enhancing satellite capabilities, expanding international collaborations, and leveraging space science for national development.
He said NASRDA will have no stone unturned in pursuit of excellence, ensuring the agency secures the necessary resources and recognition to propel it forward.
“The relationships we build today will pave the way for tomorrow’s advancements in space science.
“Innovation and progress thrive in an environment built on collaboration and inclusivity”, he stated.
He emphasised that with the support of the government, international partners, and a dedicated team, NASRDA is poised to make significant strides in the evolving global space landscape.
“We are on the brink of a new era for Nigeria’s space agency. Together, we will ensure our nation stands out in the global space economy”, he said.
Corlins Walter