Alphabet (GOOG, GOOGL) is set to report Q4 results tonight after the close with a conference call to follow at 4:30pm ET. GOOGL (we will use the voting right Class A shares here) usually reports results right after the bell.
Capital IQ consensus stands at EPS of $9.62 on Revenues of $25.14 bln. GOOGL does not guide and releases results on its web site
GOOGL has seen its growth pick up as it is finally benefiting from its YouTube acquisition. It still benefits from its Android-driven ad business in mobile which is flourishing.
- Revenue Growth- The $25 bln reflects revenue growth of 17%. Impressive for a company the size of GOOGL but would be cause for concern given the 20%+witnessed in 2017.
- Aggregate cost per click- Expected to decline 10.7% y/y which is one of the small headwinds from the uptick in YouTube monetization and mobile. Q3 saw a decline of 11% compared to expectations of a decline of 5% due to the increased mobile usage.
- Cloud Business- GOOGL has been trailing AMZN by a mile here and MSFT by a healthy margin but has been pressing further into the area. GOOGL announced it would expand its partnership with INTC during the quarter.
- Tax Issues- A few fronts here but the big one for analysts will be comments around a potential repatriation. GOOGL's effective tax rate in Q3 was 16% so it is not viewed as one that will benefit from a corporate tax cut.
- New Platform- At the end of the month GOOGL will launch its redesigned paid search text ads.