Google shares down after 1Q report as analysts point to expenses
By APFriday, April 16, 2010
Ahead of the Bell: Google down after 1Q report
NEW YORK — Google Inc.’s shares fell Friday morning after the Internet search leader reported first-quarter results that failed to support a recent run-up in the stock.
Google’s stock fell $28.30, or 4.8 percent, to $567 in premarket trading. That puts it back where it was a week ago.
The first-quarter results posted late Thursday showed, as expected, a rebound in online advertising spending. Earnings rose 37 percent and revenue surged 23 percent, slightly ahead of analysts’ published expectations.
Analysts said the results showed minor increases in expenses that could be prompting the stock pullback, but remained positive on the company.
Youssef H. Squali at Jefferies & Co. said the dip in the stock is a buying opportunity, “as we believe Google remains the best play on the online ad recovery.” He maintained a “Buy” rating and raised his price target to $710 from $695.
Aaron Kessler at Kaufman Bros. trimmed his price target to $725 from $740 because of higher research-and-design and sales-and-marketing expenses. He also trimmed earnings estimates for this year and the next by about 1 percent.
