Tuesday, April 22, 2008

Another Yummy Quarter From Yum Brands

Yum Brands Inc. (yum) the world's largest restaurant chain which owns Taco Bell, KFC, Pizza Hut and A & W restaurants announced a 31% jump in quarterly profit today April 22, 2008. Of course, growth was fueled by China were they saw 12% year over year growth!

Things will only be getting stronger for Yum Brands in China were they open up a KFC every single day of the year! Not only do the Chinese people love KFC, but the upcoming Olympics should also bode well for them, as Westerners will flock to the restaurants they know in China like KFC and Taco Bell.

Let get to the numbers, first-quarter net income rose to $254 million, or 50 cents per share compared to $194 million, or 35 cents per share, a year earlier.

Earnings per share were 42 cents a share after backing out a gain from the sale of KFC in Japan, analysts were looking for 40 cents, so they beat that handily, even in this tough economic environment. Revenues for the quarter were $2.4 billion up from $2.2 billion.

One of the more promising signs from the earnings from Yum Brands was that they posted growth at established restaurants in the United States, reversing year-earlier declines and quelling fears that a slowdown in the US would hurt Yum's bottom line.

Yum Brands (yum) also raised its forecast for 2008 per-share earnings to $1.87 from $1.85, another encouraging sign from the fast food giant!

Of course, here at Stock Picky we have been behind this slow moving giant for quite some time now. Sure, it is not the most exciting stock to watch, but it pays a decent dividend of 0.15 cents per share or a 1.56% dividend yield. Nothing too exciting, but this company still has a lot of room to grow not just in China, but all over the world! Everyone knows about KFC, Taco Bell, A & W and Pizza Hut, they are strong brands that will always draw in customers time and time again as they spread across the globe.

Yum Brands is a great long term investment for anyone who wants own a stock they don't have to watch every day. For more reasons to own Yum Brands check out Yum Brands in China.

Thursday, April 17, 2008

Google Blows Out The Numbers!

Nervous Google investors got a big reassurance as Google (goog) reported 1st quarter earnings per share today 4-17-08 of $4.84 per share. The analysts were looking for $4.52 per share. Gross revenue rose 42 percent to $5.19 billion, analysts were looking for $5.13 billion.

With the ridiculous news coming out of comscore a few weeks back, the stock was punished for inaccurate comscore's paid click data. If you were paying attention you would know that Google had already told us that they were reducing bad clicks, and that there click data could suffer, but that it would generate higher revenue per paid click. Obviously, they were correct and comscore now has zero credibility! Here is a couple highlights from the quarter...

• Revenue growth of 42% Y/Y and 7% Q/Q
– Google properties revenue growth of 49% Y/Y and 9% Q/Q
– Network revenues increased 25% Y/Y and 3% Q/Q
– Growth in international markets continued to be strong, with $2.7 billion in Q1 international revenue

• Operational Highlights
– Improvements in search quality remain key focus
– Continued ads quality initiatives to show users better, more relevant ads
– Increasing value for advertisers and publishers with broader and deeper solutions

• Acquisition of DoubleClick gives Google the leading display ad platform
– Strong Apps traction and addition of functionality to Google Apps suite of products

Take a look a these slides from their earnings report and let me know if you notice a pattern...

Google's Quarterly Revenue Growth Graph

Google's US Vs. International Revenue Growth

In summary, I have been behind Google since very near the beginning and their growth has still only just begun the way I see it. If you have been waiting on the sidelines to jump in now is the time. Google's stock has been beaten down with the rest of the market unfairly, and they have silenced all the critics with this beat. The shorts are running to cover as Google is up over $80 in after hours!

Internet advertising and mobile advertising are the waves of the future because of their unique ability to target. This makes a for great return on investment for advertisers which is exactly what they are all looking for. The advertising market is estimated at 1 trillion dollars and Google is only going to capture more of that quarter after quarter, year after year. One of the best long term investments out there.

Think about this, many analysts had lowered their first-quarter estimates by 12 cents a share on average. So, 1st quarter 2008 earnings still beat by those lofty analyst's targets by 0.20 cents! Those same analysts that have price targets as high as $900... Google still beat them. This story is far from over...

For more reasons to own Google check out these posts...

Yahoo Tests Outsourcing Search To Google

The Google Checkout Effect

Google Misses By A Penny, Does It Matter In The Long Term?

Stock Outlook 2008

The Real Winner Of Cyber Monday Is...

Or you can view all of them on one page here!

Wednesday, April 9, 2008

Yahoo Tests Outsourcing Search To Google

In what could be considered the ultimate white flag of surrender Yahoo has agreed to begin using Google's Adsense for search to help boost it's revenue and fend off an increasingly hostile Microsofty. Even though this test is small at only 3% of search queries in The United States, just the fact that Yahoo is considering such a move shows you how much of a lead Google has on Yahoo's ad platform.

Analysts have been suggesting Yahoo try out this partnership a long time ago, and that Yahoo could actually benefit as Google generates more money for each search query, and has superior results. Google meanwhile managed to continue it dominance in search by gaining an amazing 67% of all US searches according to Hitwise, and most say that numbers for the world are even greater!

So, what does this mean for "low" Google's share price? Well, they report earnings on April 17th, next Thursday so I would say if you don't have a position already, I would be waiting on the sidelines till after the earnings report, or perhaps just dip your toes in the water and buy a little bit. Google's stock price has been hammered along with most of the Nasdaq this year falling from as high as $747 on the G-phone rumors.

The economy could weigh on Google's results this quarter, but I think that long-term Google will be one of the best investments in the Tech Sector. Microsoft is looking increasing desperate with it's very generous offer to buy Yahoo to form... uh Microhoo I guess. Yahoo, is meanwhile being distracted by this offer as their employees fear for what may be coming tomorrow.

Google on the other hand continues marching on... gaining market share and implementing quality controls to their ad platform that will in the end produce better results, and higher revenues.

That being said, if they miss the numbers the stock will drop, possibly even quite dramatically. If this is the case though, I will certainly be adding to my position as a slowdown in the economy can only last so long and Internet advertising will continue to grow for years and years to come as consumers increase their consumption online adding to Google bottom line. Plus, the Google Checkout Effect should help in the future as they compete with the entrenched Paypal and Google's new App Engine will add to their revenues as well once they start charging for it.

What are your thoughts on company's coming earnings report and it's long term prospects?