* GOOG $470-495-482 beats by $0.37, beats on revs : Reports Q1 (Mar) earnings of $3.68 per share, excluding non-recurring items, $0.37 better than the Reuters Estimates consensus of $3.31; revenues including Traffic Acquisition Costs fell 99.8% year/year to $3.7 mln vs the $3.57 bln consensus. GOOG revs excluding TAC $2.53 bln vs $2.49 bln First Call consensus. "The global growth of our core search and ads business and our focus on building our partnerships drove our strong results in the quarter," said Eric Schmidt, CEO of Google. "We continued to expand our worldwide footprint, adding important new partners and growing our platform to increase our ability to deliver targeted and measurable ads. The ongoing expansion of our network allows us to improve the user experience through new opportunities and programs." Google Conference Call Summary (471.65 -4.36) -Update : Expects that International sales will eventually be greater than 50% eventually... Says they are showing fewer ads which are worth more because they have been better targeted; says that they have increased their click through rates... Continues to see momentum in their International business... UK was particularly strong... co says they may see additional pressures on TAC rates going forward... says margins may decline as they continue to invest heavily in the business... majority of CapEx is infrastructure... International revenues: Revenues from outside of the United States totaled $1.71 billion, representing 47% of total revenues in the first quarter of 2007, compared to 42% in the first quarter of 2006 and 44% in the fourth quarter of 2006. Had foreign exchange rates remained constant from the fourth quarter of 2006 through the first quarter of 2007, our revenues in the first quarter of 2007 would have been $23 million lower. Had foreign exchange rates remained constant from the first quarter of 2006 through the first quarter of 2007, our revenues in the first quarter of 2007 would have been $115 million lower... stock trading at $481.31 in after hours. So far heading into the conference, minus a few moves, stock has traded between $480-485 and reached an after hour high of approx $492.
Google: Color on quarter (471.65 ) : Stifel notes GOOG reported net revs of $2.55 bln and diluted EPS of $3.68. Firm notes gross margins declined slightly to 60.0%, down from 60.3% last quarter. Net margin was down sequentially from 46.2% to 39.3%. International revs contributed 47% of total revs, compared to 44% in the fourth quarter of 2006 and 42% in the first quarter of 2006. Firm notes they would be aggressive buyers of the stock at current levels... Cantor notes GOOG posted strong 1Q07 results, reinforcing their view that the co is taking considerable share in the rapidly expanding online ad market and solidifying its status as the linchpin to the Internet economy. Firm notes GOOG delivered extraordinary y/y net rev growth in conjunction with impressive EBITDA margins, a unique combination for any co, but particularly so for one of GOOG's size and in comparison to other Internet bellwethers. ThinkEquity raises their tgt on GOOG to $620 from $600 following strong 1Q07 as the co continues to gain global share and drive out-sized advertising yield in its core search business. They believe GOOG has additional rev drivers emerging in offline advertising, video, and mobile-each of which could be $1 bln+ opportunities in several years. Firm notes GOOG also continues to demonstrate strong share gains and monetization trends in the faster-growing international markets and should increasingly expand the reach of its network business to become more relevant for branded advertisers... Bear Stearns believes that while there are plenty of reasons to be pleased with GOOG's results, that the next leg of the stock will be driven by what's on the horizon for GOOG - the cash flows from outside the core business. Firm believes that the mere proving of progress in any of these areas would be enough for investors to give some credit, and hence drive the next leg of the stock closer to their $600 2007 tgt.
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