I'm not disappointed in ya, Google

Since the mass "disappointment" over Google's earnings have died down slightly, I wanted to say a few things about earnings "expectations." I'm sure you've seen the headline or some variation of "Google misses estimates by a mile!" What most people don't realize is Google doesn't give any guidance for their earnings. Any earnings that analysts are expecting are just mass speculation. On the other hand, if a company had issued estimated eps or adjusted previous guidance, than yes. I understand missing that by a mile. But if there are no estimates, how can you miss them?

Google ended the 4th quarter, earning $1.22 a share. Excluding the cost of stock options and other charges, Google said it earned $1.54 a share. Analysts were expecting $1.76 a share. From this, it looks like Google did miss their earnings by a mile. But wait.

Their sales rose 86% to $1.92 billion, while their net income rose 82%. Correct me if I'm wrong, but an 86% increase in sales? That's impressive in itself. Google said most of their earnings "miss" resulted from a higher effective tax rate. Original estimates had their tax rate at 30%, but actual numbers had it closer to 42%.

To many investors, the earnings disappointment signals the end of Google's bullish run since the IPO. I, on the other hand, think there's still room to grow. Analysts are currently mixed over Google's future.

• UBS cut Google from buy to neutral.
• Prudential upped their price target to $500.
• JMP Securities cut their price target from $575 to $550.

If you were wanting to buy Google before, this pullback in share price might be just the thing you need.