Photo Credit: Vince Smith

Alphabet Inc. (GOOGL) Information Technology – Internet, Software & Services | Reports February 1, After Market Closes

Key Takeaways

Alphabet, the Google holding company, is scheduled to report fourth quarter earnings February 1, after the market closes. Alphabet completed an operational restructure to better improve accountability and transparency between its core business, Google, and its moonshot investments. Google will continue on as the company’s legacy business and include properties such as search and advertising, while Alphabet contains higher growth initiatives such as self-driving cars, health care, Google-X and  smart homes, among other things. This will be the first quarter that investors get a peek into how those both of those segments have performed since 2013.The reorganization and new cost cutting initiatives helped Alphabet shares increase 46% in 2015. With another favorable quarter, Alphabet is on the verge of eclipsing Apple as the most valuable company in terms of market capitalization. 

Alphabet’s focus on innovation and growing its already dominant search division has contributed to the recent string of robust growth. Thanks to growing mobile initiatives, the introduction of YouTube Red, continued acquisitions and the aforementioned reorg, Alphabet is poised to beat expectations yet again. This quarter, the Estimize consensus is calling for EPS of $8.17 and revenue of $16.892 billion. These expectations have been rising into the report, and revenue estimates have just eclipsed the Street’s consensus by $26M, with the Select Consensus (weighted more heavily for historically accurate analysts and more recent estimates) is even more bullish, expecting a $31M beat on the top-line. Compared to Q4 2014, this reflects a projected YoY increase in EPS and revenue of 19% and 17%, this would be the highest revenue growth rate for GOOGL in over 2 years.  Alphabet appears to be firing on all cylinders and this upcoming earnings report should be no different.