Alphabet Inc (GOOG)

[SeriousMoney]

Google expected to report profit up 53%
Sales are seen leaping 85% as ads exceed Yahoo's level
By Bambi Francisco, MarketWatch
Last Update: 1:07 PM ET Apr 20, 2006

SAN FRANCISCO (MarketWatch) - Google Inc. is expected to report a surge in first-quarter net income as its advertising sales are estimated to exceed those of Yahoo's search ad business.

The Mountain View, Calif., search giant is expected to post earnings excluding stock-based compensation of $1.97 a share, up 53% from the year-earlier period's $1.29 a share.
Sales excluding expenses Google pays to its distribution partners are estimated to grow 85% to $1.47 billion from $795 million.

Ahead of the news, Google (GOOG) shares rose modestly to $410.54, as many investors expect Google to deliver even better sales growth.

"Yahoo's quarter-over-quarter growth implies that Google should grow net revenue in the high teens quarter-over-quarter," said Anthony Noto, analyst at Goldman Sachs. Yahoo (YHOO) , which reported quarterly results earlier this week, is estimated to have grown search revenue by 9% sequentially.
Analysts' consensus sales forecasts peg Google growing revenue at nearly 14% from the fourth quarter. And at least three analysts surveyed by Thomson/First Call expect Google to generate sales above $1.5 billion, which equates to a sequential revenue growth rate of 19%.

With Google at current prices, the market is pricing in 15% sequential growth, according to a number of traders and analysts. But if Google delivers only 13% sequential growth, Goldman's Noto said he would still maintain his $490 price target.

Outlook

While Google does not provide estimates, as other companies do, the company's results and comments will help analysts adjust their own expectations.

Analysts currently predict that Google will earn $2.06 a share on sales of $1.58 billion in the second quarter.
For the full year, analysts expect Google to earn anywhere from $7.70 to $9.33 a share. The consensus earnings-per-share estimate is $8.74, up 53% from a year earlier. Google is estimated to generate sales of $6.7 billion, up 68%. On the high end, at least one analyst expects Google to generate $10.4 billion in sales this year.

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