has, over the past few years, been one of the kings of tech,
dominating the broad search market to an extremely impressive
degree. The firm has also branched out into a number of other
segments such as in the phone platform world, where it has also
had a great deal of success.
Thanks to this impressive track record, the firm has managed
to surge in price over the past few years and keep its earnings
per share high, with double digit earnings growth projected for
the foreseeable future. However, the company has run into some
issues as of late and appears to be hitting a rough patch, best
evidenced by its surprise earnings miss during Thursday trading
Technology ETFs Outperforming XLK
The company experienced an error which caused earnings to go
out early, and the figures were not good, showcasing a -17%
earnings surprise for the quarter. The firm
saw EPS of just $7.35
, roughly $1.53 below the Zacks Consensus Estimate of $8.88
(Zacks utilizes a BRNI approach for earnings).
However, revenues were still solid, coming in roughly 18.6%
higher than a year ago, while paid clicks surged 33% from a year
ago, and 6% higher sequentially. Additionally, this meant that
costs per click decreased 15% on an annual basis while this
number slumped 3% compared to the previous quarter (see
Three Great Tech ETFs That Avoid Apple
Overall, the surprise about the timing and the shocking miss
were disasters for the company's stock price as GOOG was down
nearly double digits before the stock was halted, while it
finished the day lower by about 8% or roughly $60/share.
Basically, today's slump erased all of the gains that the company
had seen in the past four weeks, putting the stock below
$700/share as well.
In addition to crushing the share price of GOOG, the miss also
devastated several ETFs in the process. In fact,
according to XTF.com
, roughly 125 ETFs have Google as a component, accounting for
nearly 4% of the stock's total outstanding shares.
Given this, we have highlighted three of the biggest holders
of Google stock in ETF form and how they have held up in light of
the search giant's terrible earnings report and uncertain outlook
for the near term. These funds could either be tech products to
stay away from for those who believe GOOG's troubles are just
beginning, or products to cycle into for those who are cautiously
optimistic over Google's longer-term health:
iShares Dow Jones US Technology ETF (
- This ETF tracks the Dow Jones US Technology index holding
roughly 145 stocks in its basket. Of those firms, GOOG takes the
fourth spot, making up roughly 8% of assets.
Following the announcement, the fund finished the day down
about 1.8% on volume that was roughly two times normal. Still,
the ETF is up over 12% year-to-date, although it has fallen by
over 7% in the trailing one month period (also see
Why SSDD Is The Top Tech ETF
PowerShares NASDAQ Internet Portfolio (
This fund follows the NASDAQ Internet Index, a benchmark of firms
that trade on the Nasdaq and are in the broad internet industry.
Unsurprisingly, GOOG takes the top spot in this fund, accounting
for roughly 8.5% of assets.
Given this, some investors may be surprised to read that the
fund lost just 1.5% on the day and that volume in the fund was
just barely above historical averages. Over the past month, this
fund has done much better than IYW, falling by just 2.5%, while
it has also outperformed on a year-to-date basis, adding over 15%
in the period (read
Three ETFs with the Most Apple Exposure
First Trust Dow Jones Internet Index (
- Another big tech ETF is FDN which tracks internet firms based
on the Dow Jones Internet Index, a benchmark that holds about 40
securities in total. Much like its PowerShares counterpart, GOOG
gets the top spot although in this fund that means a 10.8%
allocation, by far the most in the ETF world.
In terms of performance, FDN slumped by roughly 1.6% on the
day on volume that was roughly double the historical average.
Longer term, it is in line with the others on the list, adding
12.6% in the year-to-date time frame, while it has lost about
3.6% in the trailing one month period.
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FT-DJ INTRNT IX (FDN): ETF Research Reports
GOOGLE INC-CL A (GOOG): Free Stock Analysis
ISHARS-DJ TECH (IYW): ETF Research Reports
PWRSH-ND INTRNT (PNQI): ETF Research Reports
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