Google Earnings Take Stock To $650 (GOOG)

Google’s (NASDAQ:GOOG) earnings are out: $3.91 EPS and Revenues were $3.01 Billion; First Call estimates on last look were $3.78 EPS and $2.94 Billion in revenues. 

The revenue number is on an ex-Traffic Acquisition Cost basis, but were listed as $4.23 Billion before backing out traffic acquisition costs.  TAC as a percentage of advertising revenues was 29% in the third quarter, compared to 30% in the second quarter of 2007.

• This one of Cramer’s "New Four Horsemen of Tech" 
• Cramer recently commented about Google stock heading to $750 (and even had $900 on his hands). 
• Google might not be in a bubble, but the action in Baidu.com might give investors some caution. 
• We recently noted what Google would look like at $700 at the current consensus estimates. 
• Google is planning big hires in Europe.

The company now has 15,916 full time employees, or about 2,100 more than last quarter’s 13,786.  It ended the quarter with $13.1 Billion in cash and equivalents.  International revenues came in flat at 48%.

Google-owned sites generated revenues of $2.73 billion, or 65% of total revenues, in the third quarter of 2007. This represents a 68% increase over third quarter 2006 revenues of $1.63 billion and a 10% increase over second quarter 2007 revenues of $2.49 billion.

Google’s partner sites generated revenues, through AdSense programs, of $1.45 billion, or 34% of total revenues. This represents a 40% increase over network revenues of $1.04 billion generated in the third quarter of 2006 and an 8% increase over second quarter 2007 revenues of $1.35 billion.

Shares closed up almost 1% at $639.62 in normal trading and are actually trading up 1.5% around $650.00 after first trading lower.  Unfortunately prints are all over the place.  Until the analyst notes come out tomorrow, we are treating this as unfinished business.

Jon C. Ogg
October 18, 2007