Oct 14, 2011

Google earns $9.72 per share, Google+ carries 40 million users

Google earned a record $7.5 billion in the third quarter, and announced that its three-month-old Google+ social network now has 40 million users. That's a big increase from the 10 million users Google+ had at the end of Google's last quarter, when it remained in a "limited" trial phase. The network opened to the public in late September. 

In an earnings release late Thursday, Google said it earned $9.72 per share. Analysts polled by Thomson Reuters had forecast earnings of $8.74 per share. 

Investors are looking to Google's advertising figures as a barometer of the overall economy, and the numbers were good -- though the cost-per-click increase was not as high as it was last quarter. Profit rose as both the number of clicks on Google's ads and the amount that advertising partners pay per click increased. 

Paid clicks rose 28% and cost per click ticked up 5% compared to last year. Sales for the Mountain View, Calif., company rose 33% over the year to $9.7 billion. Excluding advertising sales that Google shares with partners, known as "traffic acquisition costs," the company reported revenue of $7.5 billion, which beat analysts' forecasts of $7.2 billion. Shares of Google (GOOG, Fortune 500) rose 6% after hours. 

Google is continuing to spend at a quick clip. Capital expenditures totaled $680 million in the third quarter, including investments in Google's massive data centers. But Google has plenty of cash to back up its shopping spree. As of September 30, the company had $42.6 billion on hand. Google is also continuing to ramp up its hiring. Full-time staffers totaled 31,353 as of September 30, up 9% from the previous quarter. 

On Google's earnings call, analysts asked about Google's $12.5 billion acquisition of Motorola Mobility (MMI). The deal was announced in August and, once finalized, will score Google some valuable Motorola patents. Intellectual property is turning into a battlefield among tech giants including Apple (AAPL, Fortune 500) and Microsoft (MSFT, Fortune 500). 

When an analyst asked whether Google will license Motorola software to other companies, Google CEO Larry Page said "it would be premature" to discuss details before the deal is approved. "We're very excited about Android, and we see that ecosystem growing," Page said, adding that the strategy is "getting stronger" -- and the Motorola deal is part of that. 

Page also revealed that the Google Chrome browser now has more than 200 million users worldwide. Susan Wojcicki, Google's senior vice president of advertising, talked up the Flight Search that Google launched last month. She also said Google data shows that "ads that are socially annotated are more useful for users." Google executives did not talk specifically about recent antitrust concerns. 

The Federal Trade Commission has been investigating the company for evidence of abusive practices, and a federal judge recently rejected Google's planned settlement deal in its attempt to create a universal online book library. Page instead offered up a "view of the future" sentiment that echoes some of his past statements: "We are still at the very early stage of what technology can deliver. These tools will look very different in five years."

Food prices record 13.4 percent increase in China

Prices in China continued to rise at a steady pace in September, a sign that the world's largest nation still faces significant inflation pressures even amid signs of a slowing global economy. 

Overall prices were up 6.1% from a year ago, little improved from the 6.2% rise in August. The reading matched the consensus forecast, according to Jay Bryson, international economist at Wells Fargo Securities.

Food prices continued to lead the way, increasing 13.4%, the same as the previous month, and adding 4.1 percentage points to the overall increase. "Food price increases seems to be, at a minimum, stabilizing, maybe even beginning to recede for some products," Bryson said. 

Food prices were increasing at a 14.8% annual rate as recently as July. The Chinese government has been taking steps to try to curb inflation. The People's Bank of China has raised it key interest rates five times since October. And it has also allowed the Chinese currency, the yuan, to appreciate after years of leaving it pegged to the U.S. dollar. 

But critics of China charge the yuan is still significantly undervalued and this week the U.S. Senate passed legislation that would threaten steep taxes on Chinese imports unless the yuan is allowed to trade freely. High unemployment and depressed demand in most of the world's developed economies have kept many price pressures in check. The most recent Consumer Price Index in the United States showed a 3.8% rise in overall prices in the 12 months ending in August. Stripping out volatile food and energy prices, core-CPI rose only 2.0%. 

There are some concerns that both the U.S. and European economies are at risk of falling into recession, and that prices could start to fall, a dangerous economic condition known as deflation. But rapid economic growth in China of has helped take wages higher, said Bryson. That will continue to feed into higher prices there, even if overall growth starts to slow in the second half of the year. 

"Certainly commodity prices have come down due to the global slowdown, but you're seeing wage inflation there pick up. Some of that will seep through," he said. "If the Chinese economy suddenly slowed dramatically like it did in 2009, that would be felt in prices. But I don't think you'll see significant disinflationary pressures."

Oct 9, 2011

Apple iPhone 4S marks extraordinary demand

AT&T sold more than 2.00 lac of latest iPhone made by Apple Inc's in the first 12 hours its first unveiling and said it had seen "extraordinary demand" for a gadget unveiled a day before the death of Apple co-founder Steve Jobs.
The iPhone 4S was unveiled on Tuesday (October 4, 2011) and immediately underwhelmed fans who had hoped for a revolutionary design after a wait of more than 15 months. But Wall Street analysts are betting that hardware updates and software enhancements, including a well-reviewed voice-recognition software system, will pull in buyers. 

AT&T, Verizon Wireless and Sprint began taking U.S. online orders for the device on Friday(October 07, 2011). Comparisons are difficult because the iPhone is now carried by three wireless operators, versus just one. 

Last year AT&T was the only carrier to sell the phone. But the previous generation of the smartphone, the iPhone 4, was the fastest-selling mobile in Apple's history, with 1.7 million devices selling in the first three days. Estimates vary, but some analysts expect Apple to sell about 27 million to 28 million iPhones in the October-December quarter. 

The latest iPhone 4S to hit store shelves around the world on October 14, 2011. It debuts at a critical juncture for Apple. Phones based on Google Inc's Android -- such as Samsung's 005930.KS Galaxy -- are providing heightened competition just as a new CEO, Tim Cook, takes the reins. 

 Jobs, who died on Wednesday (October 05, 2011) after a long battle with pancreatic cancer, ceded the top job to Cook in August. Some analysts say people seeking to commemorate the legacy of Apple's iconic co-founder may scoop up the very last iPhone to be unveiled in his lifetime, giving sales a bump. 

Shares in Apple were holding steady at $370 in after-hours trade. Apple was not immediately available for comment. Sprint iPhone sales were not mentioned during an unrelated news conference by Spring on Friday.