Google’s earnings are good news–let me count the ways

Google’s (GOOG) good earnings news is an indicator of something,  but just what?

On October 15, after the market close,  Google reported earnings of $5.89 a share, 47 cents a share above the consensus estimate of $5.42. Revenue, after traffic acquisition costs, climbed 8.4% from the third quarter of 2008. That was about $160 million ahead of the Wall Street consensus of $4.24 billion.

But what do the numbers mean? Read more

Is the earnings rally starting to lose steam? Big surprises are moving stocks less

As earnings rallies drive along–and we’re sure in one now–investors gradually start to expect good news. More and more earnings surprises are anticipated by stock prices that start to climb before the results are reported. Part way through the earnings season a big surprise doesnt move a stock much any more since the news has been baked into stock prices in advance. And finally, the rally reaches the stage where prices actually fall on great news since even the great has been anticipated by rising prices and investors now sell the news.

I don’t think we’ve reached that last stage yet. But I can see the middle stage starting to unfold. Read more