Tuesday, January 31, 2006

Google Earnings Fall Short

Clearly Google (GOOG) shares were priced for a big earnings beat. The higher tax rate of 42% compared to 30% in Q3 hurt earnings. If you tax Q4 at 30% and add in the $90 million donation to the Google Foundation the earnings are about in line with estimates. I am getting about $1.62 in earnings if Google was taxed at 30% instead of 42%. You can add in about $0.10 for the one time donation to the Google Foundation. Google missed by about 4 cents. Don't let all the negative press mislead you.

$1.919 billion vs. $1.29 billion (Estimate)
EPS: $1.22 vs. $1.76 (Estimate)


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