Alphabet Shares Earnings Preview: Eyeing Record Highs?
CMC Markets | Jul 24, 2017 10:56
Alphabet (NASDAQ:GOOGL) Earnings Preview
Alphabet will reveal its second-quarter earnings tonight after the close in New York – 21:00 BST
Alphabet, the parent company of Google, is expected to report adjusted earnings per share (EPS) of $10.34 for the second-quarter. Sales are expected to come in around $25.6 billion, up 19% year-on-year, and up 3.9% from $20.1 billion last quarter - which beat expectations of $19.75 billion.
In the first-quarter, advertising revenue and net income rose by 18% and 29% respectively on a year-on-year basis. The company stated that revenue from advertising from all their regions around the world increased when compared with first-quarter last year. A geographically diversified revenue stream is important as it reduces the risk of becoming too dependent on certain countries.
The costs of traffic acquisitions on Google network came in above estimates in the last quarter. Alphabet’s ‘Other bets’ has seen some projects scrapped The division has enjoyed a 48% jump in revenue for the first three months of the year, but still saw its quarterly losses widen year-on-year.
The driverless cars division Waymo and the life sciences business Verily are certainly doing some interesting work, but investors will want to either see a narrowing of the loss, or at least major strides to profitability being achieved. Google has been a roaring success, but shareholders won’t remain silent forever if the ‘Other Bets’ projects remain in the red.
Alphabet saw its global headcount increase by 15% in the first part of the year, and that was largely down to hiring for the cloud business. The company saw revenue from hardware, software and cloud computing jump by 50% in the first three months. It may not be as glamorous as driverless cars, but it is a respectable sales stream, and it helps close the gap with Amazon (NASDAQ:AMZN) Web Services.
Alphabet shares have been trading at a 25.5 P/E, above its 15.6% long-term growth rate for a PEG (P/E to growth) ratio of 1.6, pricey but not dangerously expensive.
Alphabet C (NASDAQ:GOOG) shares
The stock is eyeing the record high that was created in June of $988, and the momentum is to the upside. Bulls will be looking to the $1000 mark. Pullbacks could find support at $895.
Get The App
Alphabet Class A (NASDAQ:GOOGL) shares
The share price is approaching the all-time high that was reached in June of $1008. The momentum is with the bulls. Should the stock drift lower, we could see support come into play at $915.
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.