Google is set to report Q2 earnings after the bell tomorrow, and this is one to watch out for as expectations are cloudy both for the earnings report and the corresponding price response.
Wall Street is calling for an EPS of $6.76 a share and $14.35 billion in revenue compared to Estimize’s slightly higher call of $6.77 EPS and $14.39 billion in revenue.
Some red flags stick out, however, deeper in the Estimize consensus. The three most accurate tech analysts on Estimize covering Google are calling for $6.71 EPS on average, which would be a big miss tomorrow afternoon. While Google has shown consistent revenue growth over the past few quarters, much of that growth has come from international markets: about 57% of Google’s revenue is currently coming from outside the US, and this portion of revenue may be affected by recent appreciation in the Dollar as well as macroeconomic troubles stemming from the Chinese equity markets and the Greek debt situation. In its last quarterly announcement, Google also claimed that it would be difficult to sustain past revenue growth levels at such high numbers.
A conflicting sentiment, however, arises when analyzing the price move of GOOGL over the past week, in which the stock has ran nearly 7% to $582.47. This move may have been motivated by whispers on Wall Street of a potential earnings beat. Regardless, you can see buy-side and sell-side analysts’ estimates for Google and add your own call on tomorrow’s announcement here.