Google Reports Increased Profit Despite Negative World News

Yesterday, after the close of trading in New York, Google (GOOG), the world’s most popular search engine, reported a growth in sales and profit which exceeded estimates.
By: DT Trading Limited Analytical Department
 
Oct. 18, 2011 - PRLog -- Yesterday, after the close of trading in New York, Google (GOOG), the world’s most popular search engine, reported a growth in sales and profit which exceeded estimates. The company managed to attract business from more users and clients recently thanks to additional spending on advertising. Its shares rose on OTC markets at the close of trading on the NASDAQ. Three-fourths of sales, without accounting for revenue, occur on its partner sites and those grew to $7.51 billion, Google reported on its site. This exceeded the average estimate from analysts, which was $7.23 billion according to Bloomberg. Profit, with the exception of a few points, was $9.72 per share, exceeding the average prediction of $8.76.

In world news, ratings agency Standard & Poor’s downgraded Spain’s credit rating for the third time in three years, since the country’s stalled growth and increased risk of default is threatening banks and undermining efforts to contain the sovereign debt crisis in Europe. The rating was lowered one notch to AA- with a negative outlook. Fitch Ratings downgraded Spain to the same level on October 7, when the company simultaneously lowered Italy’s rating. “Despite signs of stabilization in economic figures during 2011, we see increased risks for Spain’s growth prospects,” S & P reported. “The structure of assets in Spain’s banking system, in our opinion, will remain weak, with an increase in the amount of troubled assets in the future.”

DT Trading economists point out that S & P remains the first and only agency to lower the US’s long-term credit rating. They believe this was admittedly a surprise to all and a discretionary decision by a ratings agency looking to regain its damaged authority after the 2008-2009 crisis. In the long term, a much more unexpected decision can be expected from the oldest and most authoritative ratings agency with regards to one of the leaders of Europe, which may actually undermine the entire bond market of, for example, France.

The Euro rose against the dollar and yen in trading in Asia today due to expectations that the G-20 ministers of finance, together with other politicians, will discuss plans to deal with the European debt crisis this weekend. The European currency rose for the first time in five days since G-20 members from China to Brazil are reviewing the question of increasing the International Monetary Fund’s credit resources. After making payments on Greek bonds, Europe will have to again look for money to pay them next year. The earlier the European leaders get down to negotiations on this matter, the more likely it is that they will manage to agree to provide credit not only to Greece, but also to Italy, which has the second largest government debt in Europe. DT Trading analysts presume that in Italy’s case, even all the money in the IMF’s coffers wouldn’t be enough.

DT Trading Limited Analytical Department

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