Google Inc. (NASDAQ:GOOGL) will hold its quarterly conference call to discuss first quarter 2014 financial results on Wednesday, April 16th at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). The live webcast of Google's earnings conference call can be accessed at investor.google.com/webcast.html. A replay of the webcast will be available through the same link following the conference call. Google will release earnings prior to the conference call.
Wall Street anticipates that the internet information provider will earn $6.39 per share for the quarter, which is $0.60 more than last year's profit of $5.79 per share. iStock expects GOOGL to beat Wall Street's consensus number. The iEstimate is $6.45, six cents more than expected.
Sales, like earnings, are expected to grow, rising a healthy 11.10% year-over-year (YoY). Google's consensus revenue estimate for Q1 is $15.52 billion, more than last year's $13.97 billion.
Google is a global technology company. The Company's business is primarily focused around key areas, such as search, advertising, operating systems and platforms, enterprise and hardware products. The Company generates revenue primarily by delivering online advertising. The Company also generates revenues from Motorola by selling hardware products. The Company provides its products and services in more than 100 languages and in more than 50 countries, regions, and territories.
We don't know how to write it in 100 diffident languages, but Google's business is fairly straightforward. As the description says, "The Company generates revenue primarily by delivering online advertising." In fact, online advertising accounted for 92.8% of the search giant's revenue.
To find the money and get a sense of what GOOGL's earnings per share might look like, all you have to do is focus on search trends and spends.
Fortunately, there are companies whose business it is to keep track for such things. One such resource is Kenshoo. The firm reports that advertiser revenue increased 12% year-over-year in the first quarter of 2014.
Last year, Google's Q1 advertising revenue was $12.951 billion. Increase that by 12% and we get ad revenue for Q1 2014 of $14.505 billion. The remaining chunk of Google's sales comes from Motorola Mobile, which we expect will generate about $1.16 billion in sales for the quarter, add 'em up and iStock projects Q1's top line to be $15.668 billion, which would be a mild upside surprise.
If Google hits Wall Street's forecasted net-margin of 13.68% for the first quarter, then EPS would come in at $6.45 on a non-diluted basis and $6.39 on a diluted basis. We think margins could be a little higher as Kenshoo cost-per-click was up 2% to $0.59, plus Google's net-margin is usually much higher than 13.68%.
Overall: Google Inc. (NASDAQ:GOOGL) revenue should be a little hotter than Wall Street expects based on Kenshoo's analysis. While the iEstimate and our non-diluted calculation suggest EPS of $6.45 (just a coincidence), we think there is plenty of wiggle room for net-margin to be higher than projected, which could make $6.45 the worst case scenario?
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