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What's in the Offing for Alphabet (GOOGL) in Q3 Earnings?
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Alphabet Inc. (GOOGL - Free Report) is scheduled to report third-quarter fiscal 2018 results on Oct 25.
Notably, the stock outperformed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 10.38%.
In the last reported quarter, Alphabet delivered a positive earnings surprise of 24.34%. Earnings of 11.75 cents per share surged 135% year over year and 19% on a sequential basis.
Net revenues were $26.2 billion, which surpassed the Zacks Consensus Estimate of $25.64 billion. Further, gross total revenues of $32.7 billion increased 4.9% sequentially and 25.6% year over year.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at $10.54 per share and the same for net revenues is projected at 27.25 billion.
Coming to price performance, Alphabet’s shares have returned 5.1% on a year-over-year basis against the industry’s loss of 19%.
Let’s see how things are shaping up for this announcement.
Search & Cloud Momentum to Aid Growth
Alphabet’s dominant position in the search world remains a key catalyst for the company’s top-line growth.
Moreover, Alphabet’s continued focus on innovation of its search segment, which accounts for a major portion of total revenues, will continue to enhance the segment’s results and drive traffic on its platform.
During the third quarter, Google rolled out a new search engine called Dataset Search, which will primarily cater to the needs of scientific community.
Further, Google is strongly focused on innovation of its artificial intelligence (AI) and machine learning (ML) techniques, in order to further bolster its presence in the rapidly growing cloud market.
Google has been significantly gaining momentum in the highly-competitive cloud market over the past few quarters. In this regard, the company is aggressively undergoing expansion in the cloud market of Latin America (“LATAM”), driven by its expanding data centers, as well as improving AI and ML skills
Currently, Google is planning to invest $140 million in its Chilean data center located in Quilicura, Santiago. Notably, the recent plan is in addition to the company’s initial investment of $150 million.
Further, it has rolled out a new storage option called Cloud Filestore, which is currently at beta stage. Filestore offers managed file storage services and features network attached storage (“NAS”) facility. This will be of major help to the developers who require filesystem interface and a shared filesystem for data to run their applications.
We believe that the company’s strong endeavors toward expansion of its cloud service portfolio and data centers will continue to benefit the adoption rate of Google Cloud. This remains a positive for the company’s third-quarter results.
Google’s expanding footprint in the vehicle infotainment space will continue to boost the adoption rate of Android OS as well as top-line growth. During the third quarter, the company struck a deal with the auto alliance comprising Renault, Nissan and Mitsubishi.
Additionally, it teamed up with Toyota Motor to deploy its Android Auto into Toyota’s vehicle dashboard.
Moreover, in order to sustain its market share in the growing healthcare market, Alphabet’s healthcare division Verily is set to form a joint venture with ResMed. Through this venture, Alphabet strives to help people with undiagnosed and untreated sleep apnea.
Coming to the streaming services space, the company is leaving no stone unturned to fortify its presence in this arena by investing in original contents. Google’s YouTube has rolled out original series in India.
Notably, the company’s expanding portfolio of services will continue to drive top-line growth in the soon-to-be reported quarter.
However, it faces significant litigation all over the world as a result of its dominant position in search. Also, the company continues to face data privacy challenges, which remain a major concern for the company.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Alphabet currently has a Zacks Rank #3 but an Earnings ESP of -1.64% makes surprise prediction difficult.
Stocks That Warrant a Look
Here are a few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the to-be-reported quarter.
Advanced Energy Industries (AEIS - Free Report) has an Earnings ESP of +2.70% and holds a Zacks Rank #2.
AMETEK (AME - Free Report) has an Earnings ESP of +0.71% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
What's in the Offing for Alphabet (GOOGL) in Q3 Earnings?
Alphabet Inc. (GOOGL - Free Report) is scheduled to report third-quarter fiscal 2018 results on Oct 25.
Notably, the stock outperformed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 10.38%.
In the last reported quarter, Alphabet delivered a positive earnings surprise of 24.34%. Earnings of 11.75 cents per share surged 135% year over year and 19% on a sequential basis.
Net revenues were $26.2 billion, which surpassed the Zacks Consensus Estimate of $25.64 billion. Further, gross total revenues of $32.7 billion increased 4.9% sequentially and 25.6% year over year.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at $10.54 per share and the same for net revenues is projected at 27.25 billion.
Coming to price performance, Alphabet’s shares have returned 5.1% on a year-over-year basis against the industry’s loss of 19%.
Let’s see how things are shaping up for this announcement.
Search & Cloud Momentum to Aid Growth
Alphabet’s dominant position in the search world remains a key catalyst for the company’s top-line growth.
Moreover, Alphabet’s continued focus on innovation of its search segment, which accounts for a major portion of total revenues, will continue to enhance the segment’s results and drive traffic on its platform.
During the third quarter, Google rolled out a new search engine called Dataset Search, which will primarily cater to the needs of scientific community.
Further, Google is strongly focused on innovation of its artificial intelligence (AI) and machine learning (ML) techniques, in order to further bolster its presence in the rapidly growing cloud market.
Google has been significantly gaining momentum in the highly-competitive cloud market over the past few quarters. In this regard, the company is aggressively undergoing expansion in the cloud market of Latin America (“LATAM”), driven by its expanding data centers, as well as improving AI and ML skills
Currently, Google is planning to invest $140 million in its Chilean data center located in Quilicura, Santiago. Notably, the recent plan is in addition to the company’s initial investment of $150 million.
Further, it has rolled out a new storage option called Cloud Filestore, which is currently at beta stage. Filestore offers managed file storage services and features network attached storage (“NAS”) facility. This will be of major help to the developers who require filesystem interface and a shared filesystem for data to run their applications.
We believe that the company’s strong endeavors toward expansion of its cloud service portfolio and data centers will continue to benefit the adoption rate of Google Cloud. This remains a positive for the company’s third-quarter results.
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. Price and EPS Surprise | Alphabet Inc. Quote
Other factors to Consider
Google’s expanding footprint in the vehicle infotainment space will continue to boost the adoption rate of Android OS as well as top-line growth. During the third quarter, the company struck a deal with the auto alliance comprising Renault, Nissan and Mitsubishi.
Additionally, it teamed up with Toyota Motor to deploy its Android Auto into Toyota’s vehicle dashboard.
Moreover, in order to sustain its market share in the growing healthcare market, Alphabet’s healthcare division Verily is set to form a joint venture with ResMed. Through this venture, Alphabet strives to help people with undiagnosed and untreated sleep apnea.
Coming to the streaming services space, the company is leaving no stone unturned to fortify its presence in this arena by investing in original contents. Google’s YouTube has rolled out original series in India.
Notably, the company’s expanding portfolio of services will continue to drive top-line growth in the soon-to-be reported quarter.
However, it faces significant litigation all over the world as a result of its dominant position in search. Also, the company continues to face data privacy challenges, which remain a major concern for the company.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Alphabet currently has a Zacks Rank #3 but an Earnings ESP of -1.64% makes surprise prediction difficult.
Stocks That Warrant a Look
Here are a few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the to-be-reported quarter.
Vishay Intertechnology (VSH - Free Report) has an Earnings ESP of +0.62% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Advanced Energy Industries (AEIS - Free Report) has an Earnings ESP of +2.70% and holds a Zacks Rank #2.
AMETEK (AME - Free Report) has an Earnings ESP of +0.71% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>