ThinkEquity has lowered its profit estimates of Google Inc. (NASDAQ:GOOG), saying that its checks suggest slowing click growth in the second quarter.
Intraquarter data points as well as our search conference call on Wednesday suggest slowing query and paid click growth in 2Q, despite positive overall eCommerce data quarter-to-date, Aaron Kessler wrote in a note to clients.
According to ComScore, U.S. search queries in April slowed to 4.8 percent from last year compared to 9.5 percent in the first quarter. ChannelAdvisor also indicated a slowdown in paid clicks in May.
As a result, Kessler slashed his second-quarter proforma profit estimate for Google to $7.73 a share from $7.89 a share, while the Thomson Reuters consensus estimate stands at $7.88 a share. The analyst also reduced his net revenue expectations for the second quarter by 1.5 percent to $6.5 billion, down from consensus estimate of $6.53 billion.
For 2011, the analyst trimmed his revenue forecast by 1.5 percent to $27.34 billion, slightly below consensus estimate of $27.64 billion. Kessler also cut his 2011 earnings view by 2 percent to $33.25 a share, lower than consensus estimate of $33.93 a share.
In addition, Kessler lowered his price target on Google stock to $675 from $735.
Shares of California-based Google closed Wednesday's regular trading session at $519.17 on Nasdaq.