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Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

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Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#91

Post by eutectic »

jboggan wrote: post #84
MarkMc wrote: post #81

Net income before tax: 2012: $14,469 m 2013: $15,899 m (up 9.9%) 2014: $17,259 m (up 8.6%) 2015: $19,651 m (up 13.9%) 2016: $24,150 m (up 22.9%) Impressive growth for such a big company. Sources: https://abc.xyz/investor/news/earnings/2016/Q4_alphabet_earn... and https://www.google.com/finance?q=NASDAQ%3AGOOGL&fstype=ii&ei...

The way I like to think of it is that Google has a wondrous faucet that constantly exudes liquid gold, about a cubic centimeter every second. It is our job to keep the faucet open. Occasionally we also do other cool stuff. (19.32 gr/cm^3)(37.88 $/gr)(60 * 60 * 24 * 365 s/year) ~= $23B, close enough.

The density of gold at its melting point is actually 'only' 17.31 g/cm3.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#92

Post by ThrustVectoring »

samfisher83 wrote: post #41
daave wrote: post #36

Earlier quoted context omitted.

..and yet, TV advertising is still a huge business YouTube can target ads much better than TV, and with TrueView ads the advertiser only pays if the viewer doesn't skip, so more of the revenue is going to be coming from ads that mutually add value (at least that's the theory)

I don't get TV ads either. What is the effectiveness of it?

Building common knowledge of what choosing particular brands means. If you know everyone has seen those ads with some folks relaxing on a beach with a Corona, then you know that people will think you are laid-back when you bring Corona to a party.

This is why super bowl ads are more expensive per viewer, because the audience can expect their social group to have also seen the ads.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#93

Post by neximo64 »

hiddencost wrote: post #48
neximo64 wrote: post #35

Earlier quoted context omitted.

In short, that the rate over a decade instead of over a year is the official corporate tax rate. For Google it doesn't work out this way, still.

You really should Google the phrase "reversion to the mean", because you clearly have no idea what is going on but remain confident.

Googles mean or even max is far from 35% over their entire history. I fail to see the relevance of your argument.

Perhaps you think Google will eventually in the future pay 35% and everything in the past was just an anomaly?

Because it's a laughable thought, or if you're absolutely convinced that is the case you're incredibly naive.

You're mixing up mean reversion with extrapolation.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#94

Post by pc86 »

shmerl wrote: post #77
sanxiyn wrote: post #76

Earlier quoted context omitted.

> What I want to understand, is Google Fiber profitable or not? Just being "tired" because it grows slower than they expected, isn't a good reason to gut it. Why is it not a good reason? Even if Google Fiber is profitable, it can still be a bad idea after you consider opportunity cost.

Because it shows they they didn't really mean it. If it's profitable, and they really wanted to disrupt the stale ISP market, they should have persisted. Otherwise they just showed that they aren't any better than incumbents.

It can be profitable on paper but be a net loss after opportunity costs are factored.

If it makes $500 million a year in profit, but the resources devoted to it could be used on a project that is reasonably believes to offer (for example) $700 million a year in profit, it makes financial sense to kill Fiber.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#95

Post by curiouscats »

JumpCrisscross wrote: post #61
bitmapbrother wrote: post #59

This was due to a one time tax hit. >Alphabet was forced to swallow a $586 million tax charge on the non-GAAP line related to its stock-based compensation, costing the company about 83 cents a share — the difference between a substantial earnings miss and a huge beat. >The tax charge is the result of a rule change in the U.S. targeting companies’ use of stock-based compensation to sweeten their adjusted earnings numb…

> This was due to a one time tax hit Was it a one-time hit or is this the new normal for stock-based compensation (SBC)?

I believe the "one time tax hit" is adjusting for their past fake non-GAPP earnings which pretended giving away billions in stock wasn't material (I am guessing, so I might be wrong).

The practice of excluding billions in stock giveaways for non-GAPP earning (as not a real cost) was long seen as misleading by me and many others http://investing.curiouscatblog.net/2016/04/21/buybacks-give...

They also decided to stop using that deceptive practice, so going forward the non-GAPP earnings will be less fake.

It is sad Google used such deceptive practices. I believe it was forced into being less deceptive by accounting standards not by some decision to be less deceptive going forward.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#96

Post by pc86 »

afthonos wrote: post #25
fnovd wrote: post #4

Earlier quoted context omitted.

>Alphabet didn't miss anything; the analysts mispredicted performance. Taken to the extreme, no company ever underperforms and every unrealized expectation is the fault of the analysts.

Orthogonal to my peeve. :-) After earnings, there are two questions: 1. How did X do? 2. How did analysts think X would do? Perfect analysts would predict Xs earnings every time, and the stock would be unaffected by announcements. But analysts aren't perfect. That's ok! What's not ok is that the headlines are invariably "X misses expectations". No, the expectations were wrong . I'm not saying a company can't do well…

Analysts aren't saying "I think GOOG will grow by X% because reasons," they're saying that based on all factors, if GOOG is run well and executes well, it will grow by X%. Growing by less, even when "less" is 20% and many billions of dollars, means that the analysts believe there is some inefficiency and GOOG, which is why a stock can drop after a company posts a 20% gain in revenue.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#97

Post by shmerl »

pc86 wrote: post #94
shmerl wrote: post #77

Earlier quoted context omitted.

Because it shows they they didn't really mean it. If it's profitable, and they really wanted to disrupt the stale ISP market, they should have persisted. Otherwise they just showed that they aren't any better than incumbents.

It can be profitable on paper but be a net loss after opportunity costs are factored. If it makes $500 million a year in profit, but the resources devoted to it could be used on a project that is reasonably believes to offer (for example) $700 million a year in profit, it makes financial sense to kill Fiber.

That's what incumbents say about not upgrading their users to better network, and instead spending crazy money on buying media companies. Later offer more profits, and greed drives their decisions.

The whole point Google Fiber was trying to make (at least Google hyped it this way), was that it's possible to have a profitable ISP that offers cutting edge network. But if Google think the same way as incumbents, then they didn't just fail to prove the point, they proved the opposite. I.e. that greed stops progress.

So no, it doesn't make sense to kill Fiber if Google's intentions and declarations were true. If they lied, then yeah, it's easy to understand what happened.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#99

Post by btian »

neximo64 wrote: post #93
hiddencost wrote: post #48

Earlier quoted context omitted.

You really should Google the phrase "reversion to the mean", because you clearly have no idea what is going on but remain confident.

Googles mean or even max is far from 35% over their entire history. I fail to see the relevance of your argument. Perhaps you think Google will eventually in the future pay 35% and everything in the past was just an anomaly? Because it's a laughable thought, or if you're absolutely convinced that is the case you're incredibly naive. You're mixing up mean reversion with extrapolation.

Where did you get the 35% number from?

You know Google is a global company, right? Corporate income tax rate in Ireland is 12.5%.

Have you seen any global company paying 35% income tax?

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#100

Post by maverick_iceman »

curiouscats wrote: post #95
JumpCrisscross wrote: post #61

Earlier quoted context omitted.

> This was due to a one time tax hit Was it a one-time hit or is this the new normal for stock-based compensation (SBC)?

I believe the "one time tax hit" is adjusting for their past fake non-GAPP earnings which pretended giving away billions in stock wasn't material (I am guessing, so I might be wrong). The practice of excluding billions in stock giveaways for non-GAPP earning (as not a real cost) was long seen as misleading by me and many others http://investing.curiouscatblog.net/2016/04/21/buybacks-give... They also decided to stop…

Is there any reason someone would look at non-GAAP earnings instead of GAAP given that companies muck around non-GAAP deciding whatever costs to exclude depending on a whim?
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