Thursday, January 21, 2010

Earnings Preview: Google

. Thursday, January 21, 2010

Source: Seeking Alpha

Google (GOOG) is expected to report Q4 earnings after the market close on Thursday, January 21, with a conference call scheduled for 4:30 pm ET.

Guidance
The consensus estimate is $6.45 for EPS and $4.9B for revenue, according to First Call. Street estimates for Google's Q4 have been ratcheted up into the earnings report, as the company appeared to have weathered the recession better than most companies, and now appears ready to reap the benefits of a recovery.

Analyst Views
Stifel Nicolaus estimates Q4 revenue ex-traffic acquisition costs, or TAC, of $4.8B, adjusted EBITDA of $2.9B, cash EPS of $6.14, and GAAP EPS of $5.21. The firm has modeled Q4 paid clicks growth of +14%, flat with Q3. Stifel believes its estimates may prove conservative given the recent economic strength.

Key items for the conference call: 1) A Google China update and its revenue and EBITDA contribution, Stifel estimates revenues of $200M-$225M; 2) Paid click growth impact from new product ads and new click-to-call functionality; 3) Initial Nexus One sales figures; 4) Additional Android product releases and mobile advertising platforms including the newly released "Search Near Me Now" functionality; 5) Thoughts on Google's local strategy including the widely reported potential acquisitions of Yelp, Trulia, and Zillow; 6) An update on YouTube's monetization; 7) The status of Google Caffeine; 8) Updates to the Chrome OS timeline; 9) Updates and financial impact of Google's recent implementation of real-time search; and 10) Management's thoughts on Google Energy.

Disclosure: stockOzone does not own any of the stocks discussed here.





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