What to Watch When Alphabet Reports Late Thursday

Alphabet Inc. (NASDAQ: GOOGL) is scheduled to release its second-quarter financial results after the markets close on Thursday. The consensus estimates call for $11.30 in earnings per share (EPS) and $38.15 billion in revenue. In the same period of last year, Google’s parent said it had EPS of $4.54 on $32.66 billion in revenue.

The Google segment posted first-quarter revenues of $36.17 billion, up from $31.00 billion the previous year. Operating income rose from $8.37 billion to $9.33 billion. The operating loss on Other Bets totaled $868 million, up from $571 million in the year-ago quarter.

In the first quarter, year-over-year traffic acquisition costs paid to Google Network members fell by about four percentage points to 69% of Network revenues, or $3.48 billion. Payments to distribution partners totaled $3.38 billion, about 13% of websites revenues. Total traffic acquisition costs rose from $6.29 billion to $6.86 billion.

At the same time, paid clicks on Google websites increased 39% year over year and were down 9% sequentially. Aggregate cost per click fell 19% compared with the year-ago quarter and was up 5% sequentially.

Excluding Thursday’s move, Alphabet had underperformed the broad markets, with its stock up about 9% year to date. In the past 52 weeks, the stock was actually down closer to 6%.

A few analysts weighed in on Alphabet ahead of the report:

  • Stifel has a Hold rating with a $1,287 price target.
  • Merrill Lynch has a Buy rating with a $1,350 target.
  • SunTrust has a Buy rating with a $1,325 price target.
  • Wedbush has a Buy rating and a $1,350 price target.
  • Jefferies has a Buy rating with a $1,450 price target.
  • Morgan Stanley’s Overweight comes with a $1,400 target.

Shares of Alphabet were last seen trading down about 1% at $1,128.96, in a 52-week range of $977.66 to $1,296.97. The consensus price target is $1,335.22.