Google's second-quarter results were excellent, but that apparently wasn't good enough for Wall Street, which has come to expect stellar returns from the Mountain View, Calif. search company, reports
CNN Money. Shares fell 6 percent yesterday following its earnings report, on concerns about the company's valuation, the possibility of increased search competition, and the usual gripe: lack
of revenue diversification. Oppenheimer & Co. analyst Sasa Zorovic says Google is probably the victim of "unreasonably lofty expectations," given that the company's wow-factor continues to decline
after consistently beating analysts' forecasts. "My sense is they didn't beat by enough. It's a very strong quarter, but people are still hoping that Google can blow away numbers," Zorovic says.
Google's second-quarter earnings beat the consensus by about 12 percent; in the first quarter, its earnings beat estimates by 16 percent. The company posted net income of $721 million, up 110 percent
from last year. Google's revenue for the quarter was $1.68 billion, up 77 percent from 2Q last year. Other analysts cited high capital expenditures as a possible reason for the dip. Google spent $700
million during the quarter, including $312 million for real-estate purchases in Mountain View. Still, Google fared a lot better than Yahoo after reporting second-quarter earnings. Yahoo had warned
that third-quarter results would be lower than the Street expected, while barely meeting its earnings estimates and missing slightly on revenues. Its shares plunged 22 percent Wednesday.
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