Google Earnings Approach

S&P 500 (NYSE:SPY) component Google (NASDAQ:GOOG) will unveil its latest earnings on Thursday, October 18, 2012. 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 analyst estimate is for net income of $8.61 per share, a rise of 3.4% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $9.35. Between one and three months ago, the average estimate moved down. It also has dropped from $8.73 during the last month. Analysts are projecting profit to rise by 20% compared to last year’s $35.72.

Past Earnings Performance: The company is looking to top estimates for the third straight quarter. Last quarter, it reported profit of $8.81 per share against a mean estimate of net income of $8.75, and the quarter before, the company exceeded forecasts by 51 cents with profit of $8.75 versus a mean estimate of net income of $8.24.

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Wall St. Revenue Expectations: Analysts are projecting a rise of 58.3% in revenue from the year-earlier quarter to $11.89 billion.

Stock Price Performance: Between July 19, 2012 and October 12, 2012, the stock price rose $151.69 (25.6%), from $593.06 to $744.75. 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 November 15, 2011 and November 25, 2011 when shares fell for eight straight days, dropping 8.7% (-$53.56) over that span.

A Look Back: In the second quarter, profit rose 11.2% to $2.79 billion ($8.42 a share) from $2.5 billion ($7.68 a share) the year earlier, exceeding analyst expectations. Revenue rose 35.3% to $12.21 billion from $9.03 billion.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 29.6% over the last four quarters.

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 6.3% in the fourth quarter of the last fiscal year and 60.7% in the first quarter before increasing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.84 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 regressed in this liquidity measure from 5.84 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 44% to $14.03 billion while assets decreased 5.3% to $53.86 billion.

Analyst Ratings: With 30 analysts rating the stock a buy, none rating it a sell and three rating the stock a hold, there are indications of a bullish stance by analysts.

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

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