Science & Technology
Science and Technology
Science and Technology
Fri, May 14, 2010
Thu, May 13, 2010 Google Inc., Apple Inc., Research In Motion, Microsoft Inc. and Nordstrom Inc.
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Google Inc. (Nasdaq: [ GOOG ]), Apple Inc. (Nasdaq: [ AAPL ]), Research In Motion (Nasdaq: [ RIMM ]), Microsoft Inc. (Nasdaq: [ MSFT ]) and Nordstrom Inc. (NYSE: [ JWN ]).
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Here are highlights from Wednesdaya™s Analyst Blog:
Google: Earnings Scorecard
Following the first quarter earnings announcement on April 15, 2010, more than half the analysts covering Google Inc. (Nasdaq: [ GOOG ]) have made upward revisions to their estimates. The reason for the optimism may be traced to the strong results that were helped by the return of several big spenders, as well as the companya™s growth prospects going forward.
First Quarter Highlights
Googlea™s first quarter earnings beat the Zacks Consensus estimate by 24 cents on revenues that exceeded by 36.8%.
Revenue growth was broad-based across search, display, mobile and enterprise segments, with particular strength in the retail, travel, technology and finance verticals. Both Google-owned and partner sites performed well in the last quarter.
The company continued to see higher click rates and lower cost per click, which dampened a bit by the Nexus One launch but continued to expand margins in the last quarter. This led to another quarter of solid cash flows, which netted $2.6 billion in the last quarter.
Agreement of Analysts
Of the 34 analysts covering the stock, 18 raised estimates for the upcoming quarter and 19 for the following quarter. Additionally, 23 analysts raised estimates for fiscal 2010, while 18 raised for fiscal 2011.
Analysts, by and large, continue to believe in the companya™s strong growth prospects, driven by increasing broadband penetration and the transfer of offline ad spending online, which is expanding the online marketplace. Although Googlea™s market share could slip a bit, the company remains dominant in practically all the countries it serves, which is a big point in its favor. Additionally, Google is making headway with its mobile strategy and the companya™s Android OS is taking share.
Despite Googlea™s strong growth prospects in the core markets, a few analysts have made downward revisions. For example, 8 analysts lowered estimates for the upcoming quarter, while 7 lowered for the following quarter. However, only 5 analysts lowered estimates for fiscal 2010, while 4 lowered for fiscal 2011.
The most significant negatives as we see them at this point are the stronger competition Google is seeing in its core search market, the fiercely competitive mobile market where it is pitted against companies like Apple Inc. (Nasdaq: [ AAPL ]), Research In Motion (Nasdaq: [ RIMM ]) and Microsoft Inc. (Nasdaq: [ MSFT ]), challenges faced by Google News that resulted in its parting ways with News Corp and Associated Press, and the companya™s exit from China.
Nordstrom Earnings Preview
The earnings outlook for Nordstrom Inc. (NYSE: [ JWN ]) remains strong; ahead of its quarterly results on Thursday. While the prospects of many of its peers continue to be weighed down by the challenging macroeconomic environment, the premium fashion retailer has reported robust same-store sales in April 2010. Same-store revenue increased 7.5% in April, well surpassing the Wall Street estimates of a 6.2% rise in monthly same-store sales.
The improved sales result of Nordstrom indicates stabilization of the overall market as shoppers are gradually opening up their wallets and unleashing the discretionary spending. Industry experts further anticipate continued sales improvement in the coming monthswith inventories remaining lean and sales of high-margin accessorieshaving improved recently.
The current Zacks Consensus Estimate for fiscal 2010 first quarter is $0.55, which represents a year-over-year growth of 71.88%. Estimates are clearly going up, with 10 of the 20 analysts covering the stock raising their quarterly EPS estimates in the last seven days, while only 2having moved in the opposite direction.
For fiscal 2010, the current Zacks Consensus Estimate is $2.60 per share, which represents a 33.33% increase over fiscal 2009 earnings. About 8 of the 21 analysts covering the stock have raised their fiscal EPS estimates in the last seven days, while only 2 have lowered the same.
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