Google Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Google (NASDAQ:GOOG) will unveil its latest earnings tomorrow, Tuesday, January 22, 2013. Google provides search and advertising services and makes this information freely available to anyone with an Internet connection.

Google Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of $8.63 per share, a rise of 5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $10.08. Between one and three months ago, the average estimate moved down. It has risen from $8.62 during the last month. Analysts are projecting profit to rise by 11.6% versus last year to $33.21.

Past Earnings Performance: Last quarter, the company missed estimates by $1.53, coming in at profit of $7.35 per share versus a mean estimate of net income of $8.88 per share. In the second quarter, the company beat estimates by 6 cents.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

Wall St. Revenue Expectations: Analysts are projecting a rise of 52.4% in revenue from the year-earlier quarter to $12.39 billion.

A Look Back: In the third quarter, profit fell 20.3% to $2.18 billion ($6.53 a share) from $2.73 billion ($8.33 a share) the year earlier, missing analyst expectations. Revenue rose 45.1% to $14.1 billion from $9.72 billion.

Here’s how Google traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

GOOG

Stock Price Performance: Between November 15, 2012 and January 15, 2013, the stock price had risen $77.67 (12%), from $647.26 to $724.93. The stock price saw one of its best stretches over the last year between September 12, 2012 and September 24, 2012, when shares rose for nine straight days, increasing 8.5% (+$58.50) over that span. It saw one of its worst periods between December 20, 2012 and December 28, 2012 when shares fell for six straight days, dropping 3.1% (-$22.35) over that span.

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 32.5% over the last four quarters.

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 6.3% in the fourth quarter of the last fiscal year, 60.7% in the first quarter and 11.2% in the second quarter before declining in the third quarter.

Analyst Ratings: With 24 analysts rating the stock a buy, none rating it a sell and five rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.94 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 3.84 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 5.5% to $56.82 billion while liabilities rose by 2.9% to $14.43 billion.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)