GOOG Earnings...

Well I'm glad I didn't put out an earnings call on GOOG, either way.

The last time we had an earnings call on GOOG it was right on, but as mentioned, the signal didn't come until 15 minutes before the close. GOOG was running up like it did today at the end of day, but there was clear distribution in to the move up, that didn't happen today.

The last time we made an earnings call, price was going straight up, 3C was going straight down, that was an easy call.

However GOOG still has some longer term issues that were seen on the 60 min chart and they are obvious on the 1 day chart.

The earnings in GOOG were interesting and threw a few question marks in the mix.


For the headline numbers, “Adjusted” earnings came in at $10.08 per share, above consensus of $9.65. Net income was $2.89 billion, above last year’s $1.8 billion. On an adjusted basis, it was $3.33 billion, above consensus. Revenue was $10.65 billion, up 24% from a year ago.


Here's the potential monkey wrench...

The board gave the green light to a dividend proposal. Yo may recall AAPL recently did the same, it hasn't been trading so well since then. However the probably more relevant historical precedent can be found in MSFT.

This is what MSFT looked like BEFORE a dividend was announced...

And this is what MSFT's growth has looked like after a dividend was declared...

However the monkey wrench doesn't stop there, the dividend isn't what you'd normally associate with a dividend, it’s not a cash dividend, it’s a 2-for-1 stock split that’s going to result in the creation of a new class of non-voting stock. 


Straight from GOOG-


"Today we announced plans to create a new class of non-voting capital stock, which will be listed on NASDAQ. These shares will be distributed via a stock dividend to all existing stockholders: the owner of each existing share will receive one new share of the non-voting stock, giving investors twice the number of shares they had before. It’s effectively a two-for-one stock split—something many of our investors have long asked us for. These non-voting shares will be available for corporate uses, like equity-based employee compensation, that might otherwise dilute our governance structure."


What this means for GOOG going forward... We'll see. However for our purposes, GOOG is up in After hours. Perhaps this will cause a rotation to tech that I speculated about earlier?