Analyst comments on the GOOG earnings miss last night are fairly dismissive of it as not being a thesis-changer. Instead, people are calling it “Google Being Google” (RBC), and just plain “sloppy” (Citi).
Overall, while you can whack the company for doing a crummy job of keeping investors informed about some material accounting changes, none of this miss seems due do deterioration in business conditions. I remain on the side of the bulls on this one.
Here’s Jordan Rohan at RBC saying the same thing more diplomatically:
Google apparently now accrues its bonus payments evenly throughout the year, instead of allowing the percentage accrual to ramp towards 4Q. That change was enough to shift an incremental $60mm to 2Q07 costs, mostly in the R&D and sales and marketing lines. Unfortunately, the management team did not endeavor to inform investors of this change until the 2Q07 report.