Earnings Preview: Google

| About: Alphabet Inc. (GOOG)

Google (NASDAQ:GOOG) is expected to report Q4 earnings after the market close on Thursday, January 19, with a conference call scheduled for 4:30 pm ET.

Guidance

The consensus estimate is $10.49 for EPS and $8.40B for revenue, according to First Call. Google has demonstrated dominant search market share as well as strong growth in ad revenue. Additionally, investors will look for signs of continued strength in its new social network Google+, the latest news on its pending $12.5B acquisition of Motorola Mobility (NYSE:MMI) and progress related to the Android platform. Updates on Google Wallet and Google TV will be closely followed. The company added nearly 2,600 new employees in Q3 -- so headcount will be another key metric watched.

Analyst Views

Deutsche Bank feels comfortable with their current Q4 estimates for +10% quarter-over-quarter and +30% year-over-year net revenue growth in light of mixed commentary around European search spending and FX headwinds. The firm maintains a Buy rating and price target of $645. UBS believes Google looks well positioned to deliver a solid beat in Q4 as its proprietary data indicates mobile advertising continues to accelerate while trends in display are still very healthy and core search remains solid. Wells Fargo's estimates of $10.45 on $8.31B in revenue are about in-line with consensus. The firm's model assumes CPC growth of 8%, paid click growth of 20%, and headcount net adds of 1,300. The firm believes that currency will have a minimal impact on revenue growth in the quarter. Perhaps the biggest challenge for Google is the pending Motorola Mobility acquisition as Wells Fargo believes the company is "outside of Google's core competency and adds increased complexity to the Android ecosystem." Consensus for Q1/FY12 is: $10.13/$43.97 on $8.27B/$36.05B in revenue.