Finance Matters

Archive for April 15th, 2010

Remember….

This is from CNN in 2003:

For those who have ever wondered why the sky was a lurid red in “The Scream” — Edvard Munch’s painting of modern angst — astronomers have an answer. They blame it on a volcanic eruption half a world away.

In the first detailed analysis of what inspired the painting, an article published Tuesday in Sky and Telescope pinpointed the location in Norway where Munch and his friends were walking when the artist saw the blood-red sky depicted in the 1893 painting, and offered an explanation for why the sky seemed to be aflame.

It’s not unrealistic that if this ash plume doesn’t go away soon, and it continues to snarl air traffic and it does affect agriculture, this could have an impact on eurozone GDP.

See the range of possible impacts here >

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Viacom released more documents from its lawsuit against Google over YouTube, including Google CEO Eric Schmidt’s testimony. Don’t bother reading it. He didn’t say anything.

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It’s slow, sites don’t look like they’re supposed to in it, and all the clunky design flourishes only serve to make the actual browser window too small.

If this app was supposed to save mobile browser-maker Opera, the fat lady just sung.

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Please join us live at 4PM ET for LIVE ANALYSIS of Google’s Q1 earnings (GOOG). 

The press release should appear just after 4PM.  The conference call starts at 4:30 PM.

Here are the key consensus estimates.  A full “cheat sheet” is below.

Key Consensus Estimates:

• Q1 Net Revenue: $4.93 Billion
• Non-GAAP Operating Income: $2.7 Billion
• Non-GAAP EPS: $6.56
• Besides the search outlook, we’re keeping our eyes out for commentary on mobile, YouTube, and cloud initiatives like Google Docs.

PREVIEW

Google (GOOG) reports Q1 2010 earnings after the close on Thursday.  We’ll be analyzing the earnings live here starting at 4 PM EST.

The Bottom Line: Anecdotal reports have suggested that the recovery in search advertising has continued in 2010, so analysts are expecting modest upside to consensus estimates.

Google’s stock has drifted up for the past six weeks, but has lagged the market, in part due to the company’s decision to pull out of China.

Google will likely need to significantly beat estimates for the stock to rise on the announcement.

Background: At $589, GOOG shares are trading at about 22-times 2010 estimated EPS.  This is below historical highs of around 30-times, but still pretty pricey versus the overall tech group.  As a result, the company will need to consistently beat expectations this year (and soon demonstrate it has plans for a new growth engine beyond search) to see material multiple expansion.

Key Consensus Estimates:

• Q1 Net Revenue: $4.93 Billion
• Non-GAAP Operating Income: $2.7 Billion
• Non-GAAP EPS: $6.56
• Besides the search outlook, we’re keeping our eyes out for commentary on mobile, YouTube, and cloud initiatives like Google Docs.

Here is an excellent snapshot from Citi analyst Mark Mahaney (click to enlarge):

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See Also:

• GOOGLE EARNINGS PREVIEW: Yes, They’ll Beat Estimates, But That’s Already Priced Into Stock
• Google (GOOG) Earnings Cheat Sheet: Q1 2010

We’ve already told you about the trail of volcanic ash halting flights across Europe, but the impact is going to be felt in more ways than flight cancellations.

• The impact of this eruption is not going to just be felt today. The volcanic ash could linger in the atmosphere for 6 months causing disruptions to travel in Europe throughout the time period.

• This eruption isn’t likely to end today. Previous eruptions of the Eyjafjallajoekull volcano lasted for 12 months.

• An Icelandic volcano eruption has been cited as a cause of the French Revolution as it covered much of Europe, killing many people in Iceland, and halting trade and hindering agriculture throughout Northern Europe.

• Iceland’s tourism industry is set to be crushed by the volcano crisis, and with an economy already reeling from a banking crisis, it will be hard for the economy to handle a hit to an industry that accounts for 13.3% of the country’s export revenue.

• These ash clouds can help to reduce global warming by cooling the planet through reflecting sun light. An 1815 eruption in Indonesia previously had such an effect, but also caused a “year without a summer” where European harvests suffered and economic collapse resulted.

Here is AP video of the eruption:

 

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