Yahoo Finance Alphabet (GOOGL) to Post Q4 Earnings: What's in the Offing?
Alphabet GOOGL is scheduled to report fourth-quarter 2022 results on Feb 2.
For the quarter under review, the Zacks Consensus Estimate for revenues is pegged at $63.18 billion, indicating an improvement of 2.1% from the year-ago reported number.
The consensus mark for earnings is pegged at $1.17, indicating a 23.5% decline from the previous year’s reported figure. Notably, the figure has moved 2.5% downward over the past 30 days.
The company missed the Zacks Consensus Estimate in three of the trailing four quarters, while topping it once, delivering a negative earnings surprise of 2.28%, on average.
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote
Search & Cloud Momentum to Note
Alphabet’s robust search engine and improving search results are likely to have benefited fourth-quarter’s performance.
The company’s continued efforts toward innovation in AI techniques for the advancement of its search segment, which accounts for a major portion of its total revenues, are expected to have continued driving traffic on its platform in the to-be-reported quarter. The growing momentum across its mobile search is anticipated to have been another positive.
Growing momentum across Google Lens is expected to have contributed well to the fourth-quarter Search performance. Also, a robust translation feature and strong language models are expected to have continued to deliver enhanced user experience.
Apart from this, the multi-search feature in Google Search is likely to have continued improving the search results. The feature allows users to use both words and images in their search query.
Technical advancements in Google Assistant and Google Maps are expected to have driven the momentum across Search, which, in turn, is expected to have contributed well to the performance of Google Services in the quarter under review.
Strengthening entertainment, learning and educational content on YouTube is anticipated to have continued boosting the adoption rate of the app in the quarter under review.
Strengthening user momentum in YouTube Shorts is expected to have been a tailwind. Google’s growing efforts to bolster relationships with content creators are likely to have acted as a positive.
The company’s increasing investment in expanding its mobile video tool offerings is anticipated to have been another positive.
In terms of cloud prospects, Google has been significantly gaining momentum in the highly competitive cloud market on the back of its expanding cloud services portfolio and an increasing number of data centers. The impacts of the same are expected to have driven the company’s cloud revenues in the quarter under review.
The solid adoption of Google Workspace is likely to have contributed well to the performance of the Google Cloud segment.
Google Cloud’s deepening focus on helping businesses improve productivity, reducing costs and exploring new growth avenues are expected to have aided it in strengthening its customer base.
Android, Meet & Waymo Efforts to Consider
Google’s strength across Android, Meet and autonomous driving is anticipated to have aided its fourth-quarter performance.
The growing momentum across Android 13, which offers new personalization features, strong privacy controls and a seamless experience with connected devices, is likely to have benefited the company’s performance in the to-be-reported quarter.
Google’s persistent efforts to infuse its video conferencing software, Google Meet, with advanced features are likely to have bolstered its user base in the quarter to be reported.
The growing prospects around Alphabet’s self-driving unit, Waymo, are expected to have been other major tailwinds. The expansion of its ride-hailing operation across multiple locations is expected to have benefited its performance in the to-be-reported quarter.
Advertisement Weakness to Consider
Slowdown in advertisement spending is likely to have continued impacting the company’s fourth-quarter performance. Moreover, weakening momentum across YouTube and Network advertising is likely to have been a major headwind for the company.
Declining revenues from Play ads are expected have continued hurting its advertisement business in the fourth quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Alphabet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Alphabet has an Earnings ESP of -0.65% and a Zacks Rank #3 at present.
Stocks to Consider
Here are some companies that, per our model, have the right combination of elements to post an earnings beat in their soon-to-be-reported quarterly results.
AMETEK AME has an Earnings ESP of +0.68% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMETEK is scheduled to release its fourth-quarter 2022 results on Feb 2. The Zacks Consensus Estimate for AME’s earnings is pegged at $1.47 per share, suggesting an increase of 7.3% from the prior-year quarter’s reported figure.
PayPal PYPL has an Earnings ESP of +3.19% and a Zacks Rank #3 at present.
PayPal is set to report its fourth-quarter 2022 results on Feb 9. The Zacks Consensus Estimate for PYPL’s earnings is pegged at $1.19 per share, suggesting an increase of 7.2% from the prior-year period’s reported figure.
Analog Devices ADI has an Earnings ESP of +1.13% and a Zacks Rank #3 at present
Analog Devices is scheduled to release its first-quarter fiscal 2023 results on Feb 15. The Zacks Consensus Estimate for ADI’s earnings is pegged at $2.59 per share, suggesting an increase of 33.5% from the prior-year quarter’s reported figure.
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