was successfully added to your cart.

GOOG: The King of Earning’s play is here (Part-1)

January 26, 2007

Arguably, the most favorite stock for option traders is going to announce 4th Qtr earning results on Jan 31, 2007. This stock market darling has never (except once) missed the earning in the past.

SYMBOL
PERIOD
EPS ESTIMATE
EPS ACTUAL
PREV. YEAR ACTUAL
DATE/TIME (ET)
GOOG Q4 2006 $ 2.90 n/a $ 1.54 31-Jan-07
GOOG Q3 2006 $ 2.42 $ 2.62 $ 1.51 19-Oct-06 AMC
GOOG Q2 2006 $ 2.22 $ 2.49 $ 1.36 20-Jul-06
GOOG Q1 2006 $ 1.97 $ 2.29 $ 1.29 20-Apr-06
GOOG Q4 2005 $ 1.76 $ 1.54 $ 0.92 31-Jan-06
GOOG Q3 2005 $ 1.36 $ 1.51 $ 0.70 20-Oct-05
GOOG Q2 2005 $ 1.21 $ 1.36 $ 0.58 21-Jul-05
GOOG Q1 2005 $ 0.92 $ 1.29 $ 0.53 21-Apr-05
GOOG Q4 2004 $ 0.77 $ 0.92 n/a 1-Feb-05 AMC
GOOG Q3 2004 $ 0.56 $ 0.70 n/a 21-Oct-04 AMC

Source: Above data is from http://www.earnings.com/ (an essential tool in OptionPundit’s toolbox).

Below is a snapshot from Reuters on what Wall Street is expecting from GOOG. If you observe from the below trends, you will notice that there are mixed signals. While revenues are rising across different time span, earnings are not. Earning estimates are trending up for both this qtr and next year, but declining for next qtr.

Consensus Estimates Trend

In U.S. Dollars
Current
1 Week Ago
1 Month Ago
2 Months Ago
1 Year Ago
Revenue (in Millions)
Q4: 12/2006 3,135.10 3,122.83 3,122.73 3,121.07 2,819.46
Q1: 03/2007 3,510.41 3,510.76 3,509.43 3,501.09 3,199.03
FY: 2006 10,534.37 10,522.52 10,522.44 10,519.40 9,483.51
FY: 2007 15,231.49 15,194.50 15,169.00 15,176.62 12,898.47
EPS
Q4: 12/2006 2.90 2.89 2.89 2.87 2.52
Q1: 03/2007 3.23 3.24 3.25 3.24 2.83
FY: 2006 10.32 10.31 10.33 10.31 8.76
FY: 2007 13.90 13.87 13.86 13.79 11.97

How to make money from this announcement based on mixed signals? Well, Let’s start our jorney of exploring GOOG.

I would very much appreciate your comments, feedback and perspective. Keep pouring in ideas !!

Here is Part-2

Profitable trading,
OptionPundit

3 Comments

Leave a Reply

Facebook IconTwitter Icon