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TheStreet Open House

Good, Flat and Mixed: Google (GOOG), Capital One (COF) and Chipotle (CMG) Report 3Q

NEW YORK (TheStreet) -- Google (GOOG), Chipotle Mexican Grill (CMG) and Capital One (COF) reported mixed third-quarter results after the bell.

Google recorded a 12% increase in revenue to $14.89 billion for the third quarter. The search engine behemoth said net revenue for its Internet business was up 23% year on year to $10.8 billion from $8.76 billion. Net profit was $2.97 billion, or $8.75 a share, compared to $2.18 billion, or $6.53 a share, in the year-ago quarter.

Its mobile phone business, Motorola, continued to bleed, reporting an operating loss of $248 million compared to a loss of $192 million for the same period a year earlier. Revenue fell 34% year on year to $1.18 billion.

During an earnings conference call, CEO Larry Page said mobile continues to benefit Google's YouTube business with 40% of the traffic from the site originating from mobile devices. In the third-quarter 2012, 25% of traffic came from mobile and a year earlier, merely 6%.

Page also added that he would not regularly participate in quarterly earnings calls going forward, explaining "you're depending on me to ruthlessly prioritize".

"About two years ago when I became CEO again, my goal was to make sure Google maintains the passion and soul of a startup," he said. "Great is just never good enough."

Shares gained 8% to $960 in after-hours trading, an all-time high for the ubiquitous tech firm.

TheStreet Ratings team rates Google Inc as a Buy with a ratings score of B+. The team has this to say about their recommendation:

"We rate Google Inc (GOOG) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Capital One Financial Corp said third-quarter net income dropped 6.3% to $1.1 billion, or $1.86 a share, compared to $1.18 billion or $2.01 a share in the year-ago quarter. The Virginia-based bank reaped net revenue of $5.7 billion, a less than 1% increase on a year earlier.

Though growth remained flat, the company beat Yahoo! Finance analysts' expectations of $1.80 a share on revenue of $5.58 billion.

"Our businesses continue to deliver attractive, sustainable and resilient returns and generate capital on a strong trajectory," said CEO Richard D. Fairbank in a statement. "We remain focused on important levers that will sustain and improve our profitability and our ability to distribute capital."

In after-hours trading, shares boosted 1.9% to $73.50.

TheStreet Ratings team rates Capital One Financial Corp as a Buy with a ratings score of A. The team has this to say about their recommendation:

"We rate Capital One Financial Corp (COF) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Fast-casual restaurant Chipotle beat expectations on revenue, while falling short on profit. The Mexican eatery reported an 18% increase in third-quarter revenue to $826.9 million and net income of $83.4 million, compared to $72.3 million in the year-ago quarter.

Earnings per share came in at $2.66 a share, lower than analysts' expectations of $2.78 a share, according to Thomson Reuters. Profitability declined as operating margins slipped 60 basis points to 26.8% on higher food and marketing costs.

Shares gained 8% to $474.10 in post-market trading, surpassing its 52-week high of $447.65 by a wide margin. 

TheStreet Ratings team rates Chipotle Mexican Grill Inc as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate Chipotle Mexican Grill Inc (CMG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Written by Keris Alison Lahiff.

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