Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Alphabet Earnings: Mark Your Calendar

By Daniel Sparks - Updated Apr 16, 2019 at 8:36AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Here's what to watch when the Google parent company reports results next month.

Alphabet ( GOOG 0.78% ) ( GOOGL 0.92% ), the parent company of Google, has already put a date to its first-quarter earnings release. The tech giant will report its first-quarter results on April 29. 

Alphabet's business is growing nicely recently. The company reported strong revenue growth in its fourth quarter, fueled by strength in advertising and a sharp rise in "Google other" revenue. Going into the company's first quarter, investors will be looking for more of the same.

Ahead of Alphabet's first-quarter results, here's a preview of some key areas to watch.

Check out the latest earnings call transcript for Alphabet.

Executives walking into Google's headquarters entrance

Image source: Alphabet.

Revenue and earnings per share

In Alphabet's fourth quarter, revenue rose 22% year over year to $39.3 billion, easily beating a consensus analyst estimate for revenue of $39.9 billion.  Earnings per share also came in above analysts' consensus forecast for the metric. EPS was $12.77 -- higher than a consensus estimate of $10.82.

For Alphabet's first quarter, the consensus analyst estimate currently calls for revenue of $37.4 billion, up about 20% from revenue in the year-ago period. For EPS, the average estimate is $10.59, down from $13.33 in the year-ago quarter. Notably, however, Alphabet's earnings per share in the year-ago period saw a $3.40 benefit from a new accounting standard that changed the way companies account for equity security investments.

Google other

Of course, most of Alphabet's revenue is driven by its advertising business. But investors shouldn't overlook "Google other" revenue, or revenue from cloud, hardware, and the Android app store. Alphabet's Google other revenue in its fourth quarter was $6.6 billion, accounting for nearly 17% of total revenue.

This segment is seeing rapid growth. Other revenue was up 31% year over year in Q4. Even more, this growth was driven by all three of the segment's main constituents: cloud, hardware, and the Android app store.

With Google other revenue seeing accelerated year-over-year growth recently (31% growth in Q4 compared to 29% growth in Q3), investors should look for similarly strong growth in the first quarter of 2019.

Cloud

Investors will also want to hone in specifically on any updates on Alphabet's Google cloud business -- the biggest contributor to the company's Google other segment. In the company's fourth-quarter earnings call, Alphabet CFO Ruth Porat said the company's Google Cloud Platform (GCP) has seen impressive progress recently, with GCP contracts worth more than $1 million doubling in 2018 compared to 2017. In addition, Alphabet said it is seeing strong growth in its cloud business across all of its major geographies and industries.

While Alphabet is unlikely to provide any concrete numbers on its cloud business in its earnings release, management will likely share some information about the company during its first-quarter earnings call.

Alphabet will report its first-quarter results after market close on Monday, April 29.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,885.72 (0.92%) $26.40
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,897.96 (0.78%) $22.43

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
640%
 
S&P 500 Returns
139%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.