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3 Key Estimates for Google's Q1 Earnings Report

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Shares of Google parent Alphabet Inc. (GOOGL - Free Report) climbed on Thursday as we inch closer to the release of the internet giant’s first-quarter earnings results on Monday afternoon. Alphabet is one of the most influential tech companies in the world, which means investors will want to pay particularly close attention to its Q1 financial report.

There was a time, not so long ago, when investors feared that the shift to mobile could harm Google’s bread and butter search business. Those worries have been subdued and Alphabet’s management team has diversified the company’s offerings.

Google is now one of multiple Alphabet subsidiaries, with the company currently embedded across an array of tech fields that are set to explode, from mobile payments and e-commerce to cloud computing and artificial intelligence.

Alphabet still clearly relies heavily on Google’s search business and the advertising dollars that pour in from it, but there is also much more for investors to be excited about.

Just a few days out from Alphabet’s Q1 report date, our current consensus estimates are calling for the company to post earnings of $9.21 per share, which would mark a 19.2% jump from the year-ago period.

Meanwhile, Alphabet is expected to see its Q1 revenues surge by 20.7% to hit $24.29 billion. Investors should note that our revenue estimate excludes Google Network Members revenues.

Key Report Items

With that said, earnings and revenue are just two of the many things investors will be looking at when Alphabet reports after the closing bell on Monday, April 23. In fact, it is very plausible that any post-earnings momentum might be inspired by Alphabet’s performance in specific business segments.

To prepare for this, we can turn to our exclusive non-financial metrics consensus estimate file. The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.

Based on our current consensus estimates, we expect Google’s advertising revenues to come in at $25.79 billion for the quarter, which would represent growth of roughly 20.5% from the year-ago period. In the fourth quarter, Alphabet’s advertising revenues jump about 21.6% to hit $27.23 billion.

Moving on, the “Google other revenues” category, which is comprised of the Google Play Store, Google Cloud offerings, and its hardware initiatives, is one of Alphabet’s most exciting growth units.

Our consensus estimate file is calling for Google other revenues to hit $4.32 billion, which would mark about 39.5% growth from the year-ago period. Last quarter, Google other revenues expanded by roughly 37.9% to reach $4.69 billion. Investors should note that the expected sequential downturn is likely due to increased sales from things like Google Home and the Pixel during the holiday period.

Lastly, investors should also expect to see massive growth in Alphabet’s “Other Bets” unit. Alphabet joins together smaller projects in this business segment that, for the most part, don’t generate much revenue.

With that said, some of Alphabet’s Other Bets subsidiaries—including Google Fiber and Nest—are adding to Alphabet’s top line. Based on our consensus estimates, Other Bets revenues are projected to reach $362 million, which would represent 48.4% year-over-year growth. Other Bets revenues surged 56.1% to touch $409 million in the fourth quarter.

Make sure to check back here for our full analysis of Alphabet’s actual results on Monday, April 23!

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