A couple of our GameChangers companies reported earnings this week, and I wanted to bring you up to date on how they are doing and give you my very latest advice.

Let’s start with Google (NASDAQ: GOOG), which reported an absolutely stellar quarter that quieted many skeptics and critics. The company earned $4.84 per share, well ahead of Wall Street’s consensus estimate of $4.53. Net revenues came in at $3.71 billion, also ahead of estimates. Revenues soared 42%, while earnings grew 31%.

Those are GameChanger numbers for sure! That’s why the stock bounced 20% today!

Beyond the overall growth, there were two other numbers I was especially happy to see. The first was international sales, which now make up a staggering 51% of revenues, up from 46% last quarter. Great GameChangers have strong international growth, something that is especially important right now with the U.S. dollar so weak. Google is clearly firing on all cylinders here.

The second number is what’s called TAC, or traffic acquisition costs. This is Google’s version of "cost of goods sold," or the commissions it pays to third parties to deliver and drive traffic. The great news is that Google brought down its TAC costs from 31% of revenues to 29% of revenues, which tells us they are getting more and more efficient—a trend I expect to continue for the rest of the year.

GOOG is still under our buy limit of $550, but barely. I would buy it now if you don’t own it yet. I expect growth and momentum to build, especially as the economy strengthens in the second half of the year. I continue to target $675 by the end of the year.

Nokia: Staying the Course

Nokia’s (NYSE: NOK) quarter wasn’t as good as Google’s, but it actually was a very nice quarter. You wouldn’t know it by the way investors reacted, but I think those who sold the stock made a big mistake.

NOK’s earnings grew 25% over last year, and revenue was up 28% for the same period. Those are solid numbers. Unfortunately, the stock took a 16% hit for two other reasons—both of which I’m not concerned about over the long term.

First, the average selling price for handsets fell from 89 euros per unit to 79 euros. The reason? Nokia is aggressively going after market share in developing nations, primarily China. Consumers in those nations tend to buy the cheaper phones, which drags down the average selling price. Over time, those same customers will upgrade, so I view this as positive in the long run. Most importantly, the total number of handsets sold amounted to 115 million, up a nice 27% from last year’s first quarter.

Second, management indicated that this year may prove more challenging than originally thought due to a slowdown in the U.S. economy and a possible slowdown in Europe. As we just talked about, I expect the economy to strengthen heading into the second half of the year.

The panic sell-off by mistaken investors just makes the stock a better buy for us. Even if Nokia does have a challenging second quarter, it remains a GameChanger because it is the top player in the Smart Phone wars. This cycle is just beginning to unfold, and Nokia will produce more than 40% of all high-priced, fully functional Smart Phones that are sold.

Buy NOK under our new buy limit of $32, which I’m lowering to reflect yesterday’s drop. My initial target is now $50 by the same time next year, and I still believe we’ll earn even bigger profits over time.

Apple’s New Buy Limit

Apple (NASDAQ: AAPL) has really been on the move lately, bouncing from around $120 when I started recommending it in early March to $160 today—a nice 33% pop in less than two months. Google’s strong quarter and solid numbers from Intel and IBM helped make this a particularly strong week, and the stock is now $10 above our current buy limit.

I urge you to buy Apple not just for what I believe will be good quarterly results, but I also wouldn’t be surprised if Steve Jobs raises guidance for the coming quarters. In next Wednesday’s report, I expect to hear how the company has gained share in the personal computer market with the Mac, and that the iPhone is on track for excellent growth. The company will also begin to talk about inroads into the enterprise space—new ground for Apple as it goes after business clients—and the release date for the next-generation iPhone.

I’m raising AAPL’s buy limit to $170 for new money. I believe the stock will hit $200 before the year is out, break into a new trading range and continue its march up to $250 before we see New Year’s Eve 2009 going into 2010. I could even be a bit conservative here, as I believe Apple will remain a GameChanger for at least the next 3–4 years. If you don’t already own some AAPL, make sure you get it today.

Crocs and Zoltek Preannounce

While Crocs (NASDAQ: CROX) and Zoltek (NASDAQ: ZOLT), didn’t announce full results this week, they did "preannounce," which is what companies do when they come in at the lower end of some analysts’ estimates. Zoltec’s report was fine, as revenues will be up 36% from the same quarter last year. ZOLT remains a buy under $32.

Crocs’ announcement, however, caused the stock to get hammered on Tuesday as management said earnings for the current quarter would come in far below what Wall Street was expecting. They blamed the shortfall on cold, wet weather (which does have a certain amount of truth to it), and they took a one-time hit for closing a plant.

The plant-closing doesn’t concern me, but I’m looking deeper into the earnings shortfall and what’s going on there. I believe the downside risk is limited from here, and I don’t want you to sell the stock yet. However, the miss is significant enough that I’d rather you not put any new money into the stock until I get some more information. Hold CROX for the moment. I’ll be back in touch as soon as I know more.

‘Tis the Season

The big buzz on Wall Street right now is the flurry of quarterly earnings reports that has really kicked into gear. So far, we’re seeing a fairly typical up-and-down pattern, and we ended the week with a bang thanks to Google and Citigroup.

I actually want to talk to you for a moment about badnumbers we got from the biggest conglomerate on the planet, General Electric. There’s an important lesson in here for us GameChanger investors.

GE reported last Friday, and as you may recall it was an ugly day for the markets. GE earned $0.44 per share for the March quarter versus consensus estimates of $0.51. For a company like GE, that’s a huge miss!

Major institutions were very annoyed and angry because CEO Jeffrey Immelt signaled in mid-March that all was okay and even endorsed a 10% growth rate for 2008. Immelt’s credibility is now in question everywhere, including from his predecessor, the legendary Jack Welch, who said he would "take out a gun and shoot" Immelt if the company missed its forecast again!

He’s absolutely right. GE is now in what Wall Street calls the "penalty box" for the next quarter or two. If Immelt had told analysts a few weeks ago that the quarter was a challenging one, GE’s stock would have been knocked down maybe 3%–5%, not the 13% whack (nearly $50 billion of market value!) it suffered on Friday.

Remember: Wall Street can handle bad news as long as it’s not a surprise.

Death of a GameChanger

It may seem hard to believe now, but not too long ago GE was both a great company and a great investment. Not anymore. It’s still a monster company alright, with 2008 revenues approaching $200 billion. But size isn’t really the issue. The problems are twofold: complexity and culture.

GE is just too darned complicated to be a GameChanger. It manufactures light bulbs, but also makes jet engines. It’s involved with Universal Studios and theme parks, refrigerators and ovens, complex water treatment facilities and equipment, consumer loans, medical imaging equipment and even a TV network (NBC)!

How the heck does an investor make any sense out of so many disparate businesses? It’s a very confusing company to follow as one division may have a great quarter—like the infrastructure segment just did—while three other divisions could have lousy results. Two divisions could come in right as expected.

Because of this confusion, investors won’t pay up for the stock, nor should they.  GE has been a laggard for the past seven years, and the near-term prospects are dim in view of the recent report.

If you own GE, my advice is to sell it and put that money to work in the opposite of GE—the GameChangers we invest in. And next time you receive the proxy materials to ratify GE board memberships—just say no. This company needs to be broken up because there are a few exciting divisions stuck in the mire that could be GameChangers with the freedom to operate on their own!

The Anti-GE

GameChanger companies are just the opposite of GE. They are not all things to all people. (Imagine if Apple bought Applebee’s!) They are focused and committed to dominating their respective industries. That’s why they not only have better growth rates than anyone else in their industries, they set the pace. They are guided by passionate, superior management teams that foster a culture conducive to growth.

GE, back in the old days under Jack Welch, stressed a GameChanging culture and innovation. He meant it. He expected his employees—from senior managers to workers on the line—to be vocal and speak out with their ideas. Immelt brings a more "corporate" attitude and "management by committee" approach. Oh, the company will survive, but it’s a far cry from what it was under Welch.

I also can’t help but think back to a meeting I attended with a few investors at Cisco Systems about 11 years ago. Cisco was on a massive growth trajectory, but the culture was still one of, "Speak up, and speak up now!"

CEO John Chambers was to be called simply John. Whether it was the receptionist or a worker on the loading dock, when "John" walked by and the employee had a thought or an idea, he stopped and listened.

We asked him why he did this as Cisco was emerging as a major U.S. corporation, and John (I should be able to call him that, too, right?) said, "Because these are the people who got us to where we are and, more importantly, every employee here is critical to where we are going. They have the best ideas and suggestions, and I personally want to hear as many as I can."

Game, set and match. He fostered an incredible corporate culture. Oh, and after the meeting, I bought a bunch of Cisco stock and made 2,000% in 5 years!

Today’s GameChangers

I look closely at the CEO, management and corporate culture of every stock before I recommend it to you. Our current GameChangers buy list is full of companies that leave pretenses at the front door or in the parking lot. They listen and learn from their employees, regardless of station or position.

Google is certainly one. One of the hallmarks of a GameChanger is that employees want to work there, and Google has a standing spot at the top of the list of Best Companies to Work for in America. Heck, who wouldn’t like free lunch and dinner, onsite laundry facilities, gyms, and even lava lamps?

And there’s also Costco (NASDAQ: COST), which is changing the retail business, thanks to another CEO I admire a great deal. Jim Sinegal is a modest man simply known as Jim. No pretense. No frills. Not even a corner office or a CEO-like salary.

Jim visits his company’s locations and makes it a point to say hello to every employee at the site. He is known to ask for advice, suggestions and creative ideas. Jim is sincere as he often says "I don’t have a corner on great ideas."

But don’t mistake Jim’s modesty for lack of passion. He has big dreams, and they are coming true as he builds a genuine GameChanger. No wonder his company is running away from the competition. And no wonder the stock is up 12% for us in the last four weeks. I expect much more in the coming months, all leading to a double for us. That’s the fun of investing in GameChangers!