Alphabet earnings look: Can it return to beats with a lower revenue bar?
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Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) reports earnings after the market closes Tuesday, and eyes will be on any answers it can provide for an uncertain direction for the online advertising market.
Different data points in the third quarter have indicated that the much-publicized ad recession of 2022 is either (1) turning around, or (2) limping on.
And Alphabet broke a nine-quarter streak with its last earnings report, in July, when it (narrowly) missed revenue expectations - though coming that close ended up reassuring investors in a tough earnings season.
This season, the bar has been lowered again. In the past three months, estimates for Alphabet's EPS have seen 36 downward revisions vs. two up; revenue forecasts have seen 35 downward revisions vs. just three up.
Overall, while Google plays in the social media space, its search revenues are considered more insulated from downturns than typical social-media advertising.
In particular, investors will be watching YouTube search revenue, maybe one of the biggest concerns coming out of the last print. During last quarter's earnings call, the company hasted to point out that YouTube had to lap a "very strong" comparison with 2021's Q2.
So a turnaround there will be welcome, as will continued news about the company's emphasis on YouTube Shorts, its high-stakes answer to the rampaging success of TikTok.
Google Services are expected to draw just under $64B in revenue, while its Cloud unit - which trails that at rivals Microsoft and Amazon.com - is seen recording $6.6B in revenue.
Overall, consensus expectations are for earnings per share (normalized) of $1.26, on revenues of $70.7B (which would represent 8.5% year-over-year growth).